It’s a Nation, Not Just an Economy

It’s traditional to write about economics and economists at this time of year, the end of the financial year in most jurisdictions. Publishers like to ask economists to offer their predictions for the year. The cruel editors then go back a year later and mark their score cards. Forecasts are all very well in ‘normal’ times, but few had forecast a deadly global pandemic that (so far) would infect 10.5 million people and kill 511,000….

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How deep is the financial hardship well?

It is probably no comfort to anyone to reflect on the year when investors could get 14.95% on a bank term deposit. It was January 1991, the recession Paul Keating said we had to have. People with personal loans and credit card debt watched horrified as repayment rates went to 20% and beyond. The average variable mortgage rate rose to 17.5% at the same time. The gap between the haves and have-nots in that era…

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