Working Papers

The AEI Disgraces Itself Yet Again

Why is it that the right-wing American Enterprise Institute is channelling John Quiggin and Ross Gittins?

The Economist  
Publication Date: June 2, 2005

Sir—You waxed lyrical about Australia’s 15 years of continuous economic growth. However, you gloss over the fact that Australia’s external imbalances have never been larger, even at a time when international commodity prices are booming and China is expanding rapidly. You also failed to note that Australia’s housing bubble and consumer over-indebtedness make the United States look like a paragon of frugality. A more balanced view might have asked what happens to Australia when commodity prices ebb and when China’s investment bubble bursts?

Desmond Lachman is a resident fellow at AEI.

Since the Australian economy powered through the global collapse in commodity prices in 1998 after the Asian crisis with a real annual growth rate of 6%, I think we already know the answer to that question Des!

Maybe Quiggin and Brad DeLong were right after all:

“Back in the late 1970s, the American Enterprise Institute ranked close to the Brookings Institution as a think tank you could trust not to deliberately lie to you. Now it has fallen very deeply into the pit indeed”.

posted on 07 June 2005 by skirchner in Economics

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