Working Papers

Are Australian Economists Really Cowed by Political Pressure?

Ross Gittins launches another one of his regular martyrdom operations:

except for people in privileged positions like mine, economists do have to be brave to stand up to the Howard Government with its behind-the-scenes bullying.

This is all a little bit precious, not least because it was a practice for which the former Labor Treasurer and Prime Minister, Paul Keating, was equally notorious, which is to say that none of this is anything new (and therefore hardly newsworthy).  While there may be some economists at certain investment banks touting for government business who have to worry about such political pressure, that is a conflict of interest within the bank, not a problem with political pressure as such.  If CEOs or their economists cave in to political pressure, it says more about them than it does about the government.

There was one occasion when I was working for Standard & Poor’s when I managed to get a phone call from the Prime Minister’s office, the Treasurer’s office and the office of the leader of the Opposition, all on the same day.  Far from feeling any political pressure, I took considerable comfort from the fact that both sides of politics had been more or less equally annoyed.  What was undoubtedly intended as political pressure was if anything useful feedback!


posted on 18 September 2006 by skirchner in Economics, Financial Markets

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I knew all the economists, most of them pretty well, back in the Keating years.
Yes Keating would ring up and give a spray but I do not recall one incident of Keating attempting to get someone sacked.

Cozzie is vastly different in attempting to get them sacked.
Then compare the reaction of Cozzie to Access economics when they did the work for the Opposition in 2001 and the Government reaction in 1994/5 for fightback.

you either do not know what you are talking about or you are dissembling by comparing apples with oranges.

Roscoe does know where the skeletons lie!

Posted by .(JavaScript must be enabled to view this email address)  on  09/19  at  10:14 AM

The specifics of the way in which Keating went about intimidating people may have differed, but I don’t think that means very much.  To be clear, I’m not making excuses for this behaviour, only pointing out that governments of all stripes throw their weight around in this manner.  The key issue is how people respond to it.

The examples Ross cites actually tend to disprove his argument that Australian economists are cowering in fear.  The story would have made more sense if he had said that the government had tried intimidating people and failed.  His argument that “honest men and women stay silent” in the face of government intimidation is actually insulting to the economics profession.  He wants people to believe that economists agree with him, but are too frightened to say so.  In reality, many just don’t happen to share his point of view.

Posted by skirchner  on  09/19  at  05:20 PM

I do think it means a lot.
Keating never, as much as I know, went out to deliberately get a person sacked merely because they criticised Government policy.

Costello has done so. Note how meek Bil Evans is now. Also note hoe there are NO investment bank economists who openly criticise Government policy even after a blatant deterioration in the structural budget.

Mee thinks Roscoe is much closer to the action than you are.

Things are vastly different these days.
Ask Chris Richardson about doing work for the ALP/

It is disgraceful that the best outfit for doing work for ANY Opposition have been cowered into not doing any work.

You are comparing apples with oranges

Posted by .(JavaScript must be enabled to view this email address)  on  09/20  at  10:20 AM

“Mee thinks Roscoe is much closer to the action than you are.”

I was aware of all this long before Gittins decided to include it in his column.  Note that I’m not denying these things took place, only his interpretation of it.

Bill Evans “meek”?!  Never!

Given the large number of economists who said (erroneously, in my view) that tax cuts would lead to higher interest rates, I think the evidence is against what Gittins is saying.

Gittins also likes to argue that the OECD reports contain hidden Treasury messages critical of the government!  Ross only wants to hear one thing.  The fact that it is not actually being said doesn’t bother him.

Posted by skirchner  on  09/20  at  11:31 AM

Last thing on this subject.

Bill Evans has hardly said a sentence in anger since Costello’s ‘pitch’ to Dr David.

Ever since I can recall ( early 70s)that is exactly what Treasury has done when they wanted some policy area ‘opened’ up which didn’t appear in Statement No 2 for whatever reason

Back then they merely talked to Syntec to ensure its impact.Nowadays they talk to market economists
It is mostly the RBA that converses with the economic journalists.

Posted by .(JavaScript must be enabled to view this email address)  on  09/20  at  01:28 PM

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