Reserve Bank of Australia (RBA) governor Philip Lowe apologised to those who took out home loans on the basis of his promises as late as November last year that he would not raise interest rates until 2024.
But he has made no apology for demanding that wage earners not seek pay rises to compensate for sharply rising prices.
Lowe’s “apology” was made when he appeared before the Senate economics committee on November 28.
But, in a speech to the Committee for Economic Development of Australia (CEDA) annual dinner on November 22, Lowe warned wage earners against demanding pay rises to meet price inflation, which he expected to rise to 8% by the end of the year.
Middle- and low-income households are experiencing even more pain from the rising cost of living than the official inflation rate because basic necessities, such as food, rent and energy, eat up a large proportion of their income
Yet Lowe, who gets a total remuneration of more than $1 million a year, told the well-fed CEDA dinner guests: “If we all buy into the idea that wages have to go up to compensate people for inflation, it will be painful, so best avoid that.”
Instead, he said workers should focus on becoming more productive.
He threatened sharper interest rate hikes to prevent a “wage-price spiral” and even a recession.
The RBA could certainly bring on a recession by hiking up interest rates high enough. Recessions have served the capitalist system well as a means to discipline workers by throwing them on the unemployment heap.
“It’s the economy, stupid,” the saying goes. But what is this “economy” that requires us to suck up the pain of rising costs?
The RBA governor behaves like an oracle to a heartless god demanding human sacrifice: sacrifice and the god Economy will smile upon you!
Lowe acknowledged in his speech to CEDA that major societal developments, such as climate change and the consolidation of competing trading blocs, are fuelling the rising cost of living.
He mentioned Russia’s war on Ukraine, but, strangely, left out energy companies’ blatant war profiteering.
If you fill in the predictable blanks in Lowe’s narrative, he basically said that while the corporate pursuit of profit through neoliberalism and capitalist globalisation had meant a couple of decades of low inflation, those years of economic growth also spurred climate change and conflict between major powers.
Shouldn’t the conversation really be about addressing these global problems and confronting the responsibility of the billionaire class for this dangerous mess?
Nah. The well-paid RBA governor is going full oracle in service of the god Economy.
He’s doubling down on his inflation targets and has his twitchy finger on the interest rate rise button, ready to deliver the required pain to make sure that workers, who really keep society ticking, make the necessary sacrifice to again help the capitalists get through crises born of their insatiable greed for profits.
It really doesn’t have to be like this.
Society’s resources, including our collective labour, should serve our collective interests. That’s a core value that guides the Green Left project.