Mike's Minute: Christian Hawkesby's difficult job today

To give you an insight into just how hard Christian Hawkesby's job is today, have a look at what the shadow board says. 

The NZIER has a monetary policy shadow board. It’s a bunch of economists and their view as to what should be happening. 

Some say drop by 25 basis points, one says 50, and some say don’t do anything. 

How do you deal with that? 

These are experts. They know what they are doing. Or do they? 

So no matter what Christian does some of them are going to go "what on Earth was he thinking?" 

Think about the difference between 50 basis points and nothing. 

50 basis points is a lot. 50 means things aren't good, and we need to fire the place up a bit. 

If we don't move it means things are just where we want them. 

Are they where we want them? No, is my answer. But then I'm not an economist. 

Most of them say things like "boy this is tricky". My word is "uncertainty" – the watch word of the day. 

It's through this murky mix of "who the hell knows what's going on" that Christian has to wade and produce something that will see us head into a half decent Christmas. 

Of course that’s part of the mess we are in. There is a lot of water to go under our beleaguered bridge before Christmas, and a number of decisions from the Reserve Bank, along of course with the much-dissected commentary. 

What does 25, or 50 basis points, or nothing, mean? What's old Christian thinking? 

I'll tell you this for nothing – a big part of this equation is mood. It’s the same with the Budget last week and the depreciation measures. 

You have to want to get amongst it. You have to take your mortgage rate cut and do something with it. You have to want to buy your tractor, or ute, and depreciate it by 20%. 

If you are in a funk and you're not spending, then depreciating 20% of zero is nothing and no one gains. 

Christian, or Nicola for that matter, can't do it all. At some point we have to believe. We have to have our arm twisted. We have to see a bit of light. 

The most powerful factor in any economy is us, and mood. 

At some point a switch has to go off, a decision has to be made, and we need to look forward to better days. 

Let's hope today is a part of that story. 

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