Economist Saul Eslake says it’s his job to tell the truth about the economy. Photo: Jessica ShapiroPeter Martin: Discussing the dangers not economic treason
杭州桑拿

Leading economist Saul Eslake has criticised Prime Minister Julia Gillard saying he will not be intimidated into being ”a cheer squad for the Australian economy”.

The Bank of America Merrill Lynch economist, who recently gave Australia about a 25 per cent chance of entering recession in the second half of 2015, said it was ”not my job” to talk up the economy.

”For the Prime Minister or anybody else in a position of authority to suggest that merely by doing our jobs we are somehow increasing the risk of a recession . . . I’ve been around long enough not to be intimidated in that way and I’m not going to be on this occasion,” Mr Eslake said.

The economist was referring to the Prime Minister’s speech on Monday to the Committee for Economic Development of Australia, in which Ms Gillard took a swipe at pundits who had talked down the economy, suggesting their ”unreasonable pessimism” was putting jobs at risk.

”The most irresponsible pessimists have tossed around the ‘R’ word,” Ms Gillard said.

She described such pessimistic statements as ”not so much sinister as silly”.

But Mr Eslake said it was perfectly reasonable to mention the ”r” word, or even call it by its full name: ”recession”.

By highlighting the risks facing the economy as the resources boom draws to a close, Mr Eslake said he hoped policy-makers ‘will be encouraged to think about how best to minimise the risks to the Australian economy and to Australian businesses, workers and citizens”.

To emphasise how ”childish” the economic debate had become, Mr Eslake recalled an anecdote about a senior economic adviser to US President Jimmy Carter in the late 1970s who had been told not to use the ”r” word and instead chose to refer to it as a ”banana”.

”[He] went on to say that in his opinion the American economy was at risk of experiencing a banana,” Mr Eslake said.

The economist recalled that in Wayne Swan’s 2009 budget overview the Treasurer described a recession in Australia as ”inevitable”.

”I accept that it is part of the government’s role to talk up the economy and play to its strengths,” Mr Eslake said.

”But I would be derelict in my duty if when I thought that there was a risk of recession I failed to say so because I was fearful of being intimidated by politicians.”

In a speech on Tuesday morning, also to CEDA, Mr Swan also put a positive spin on the economy, encouraging Australians not to ”lose sight of our achievements”.

The Treasurer said he did not accept the argument that Australians had squandered the resources boom.

”We sometimes read or hear the mining boom has ended. It hasn’t,” Mr Swan said.

”With apologies to Winston Churchill, we haven’t even seen the beginning of the end, but instead only the end of the beginning.”

Meanwhile, shadow treasurer Joe Hockey conceded that ”government action” might be necessary to protect the Australian economy against a downturn, despite the Coalition opposing Mr Rudd’s stimulus package during the global financial crisis.

”I would not be doing my job if I had not already given some thought as to how economic activity could be safeguarded should the downturn in the private sector become more protracted,” Mr Hockey said in his speech to CEDA on Monday night.

”In that case additional well considered government action could be appropriate.”

Mr Hockey said it was ”the height of hubris” to dismiss warnings of a possible downturn from respected observers.

”It is wise to listen and prepare.”

The original release of this article first appeared on the website of Hangzhou Night Net.

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