Interest Rates are Sky-High, Who's to Blame?
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The Reserve Bank's Rhetoric on Corporate Profits Is Underappreciated
The Reserve Bank is trying to chill household sector spending, says Jim Stanford. But it's not doing much to address the corporate profits, he says. In the last year, public sector wages grew just 2.5%. Even when inflation is growing at its normal rate of 7.8%, that's a horrendous fall in real incomes. It comes from governments wanting to keep wages down because they're hearing the Reserve Bank saying, this is a big key. They're not lifting public sector wage caps and things like that. We want there to be some cost for companies being able to make these excessive profits. That would be a cure that's worse than the disease.
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