Boomers did not start the fire – but some do enjoy the glow.

To read the original version of this comment in the original context at Macrobusiness.com.au click this link. (link may be locked – but there is a free trial available)

“…Again, to couch the argument in boomers vs the rest is to brush over the real issues….”

It is even worse than that.

It creates a massive distraction and blame-fest that can completely block any discussion of the real issue which concerns the failing model of economic management more generally known as RBA Household Debt Ponzinomics ‘HDP’.

RBA HDP is the model of economic management where the price of debt is driven down to encourage over consumption of household debt in the belief that an economy can be sustained with an endlessly expanding volume of household debt.

Debt driven asset price ponzinomics will always benefit those who are holding assets and it is no surprise that generally those people will be older.

That doesn’t make them responsible for the economic model.  Many of them would be horrified if they understood the long term damage that has been caused to the economy by driving up the value of existing residential assets with foreign debt borrowed by our taxpayer guaranteed banks.  Lack of competitiveness, bloated exchange rate, hollowed out economy, poor employment prospects for their kids etc etc.  Howard and the compliant RBA got the households of Australia well and truly hooked on private debt and now the pollies on both sides have not got a clue how to fix the problem.

Most of them don’t have a clue how it works and that is why some of those who have benefited make irritating claims that somehow being a winner under the model had something to do with their ‘virtue’ rather than just being in the right place at the right time.

If we want to fix the model we need to focus on that and not waste time picking fights with those were lucky enough to benefit from it – even if their condescension and complacency is galling.

The RBA is the prime exhibit.

I didn’t know whether to laugh or cry as Phillip Lowe marveled last week how the RBA Household Debt machine is leaking oil and blowing smoke.

“…From today’s perspective, the picture looks a little different. In many ways, the current global monetary environment is quite extraordinary….”

I have no reason to believe that any other population cohort would have resisted the seductive claims and short term booty of “HDP” Household Debt Ponzinomics.

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