Reserve Bank Governor looks for the path out of recession

Glenn Steven’s realism goes well beyond his unexpected confirmation that Australia “too, is in recession.”

The Reserve Bank governor is surprisingly pragmatic also in his assessment of current prospects for an early end to the global economic crisis.

“The politics may be harder than the economics,” he warned in a speech he delivered in Adelaide  yesterday.

That was a very perceptive  comment.

The bank rescues, that have proved necessary in the United States and several other countries, but not Australia, have one common feature.

They give bank  shareholders major benefits at huge costs to taxpayers.

And Mr Stevens said it’s not surprising that ordinary people, including taxpayers, resent that.

“But it has to be done,” the Reserve Bank Governor added.

“Otherwise economies will suffer for longer.”

Fortunately Australia has not had to bail out any of its banks.  At least not so far.

It probably won’t  at any time in the forseeable future, either.

Mr Stevens said that is one of the major advantages Australia will have, when  the world starts out on the path to recovery.

“Australia should be able to articulate such a path more effectively than most,” Mr Stevens said.

He said, too, that Australia’s close ties with Asia should also help Australia find its way out of recession more readily than many other countries.

But why are you wasting time, reading this blog?

Do yourself a favour.  Close your office door.  Take your phone off the hook.  And read the full speech at www.rba.gov.au.

That will be the best half hour you will spend today,