INFLATION: Orr lies
"[T]he Reserve Bank Governor [Adrian Orr]... likes to make up stuff suggesting that high inflation isn’t really the Reserve Bank’s fault, or responsibility, at all....
"Late last year there was the line ... that for inflation to have been in the target range then (Nov 2022) the Bank would have to have been able to have forecast the Russian invasion of Ukraine in 2020. It took about five minutes to dig out the data ... to illustrate that core inflation was already at about 6 per cent BEFORE the invasion ... It was just made up, but of course there were no real consequences for the Governor....
"And then there was last week’s effort in which Orr ... attempted to brush off the inflation as just one supply shock after the other, things the Bank couldn’t do much about, culminating in the outrageous attempt to mislead the Committee to believe that this year’s cyclone explained the big recent inflation forecasting error (only to have one of his staff pipe up and clarify that actually that effect was really rather small)....
"It is, of course, all nonsense....
See for example:
"Bottom line: all those stories trying to distract people ... with tales of the evil Russian or the foul weather or whatever other supply shock he prefers to mention, really are just distractions (and intentionally misleading ones ...). The Bank almost certainly knows they aren’t true, but they have served as convenient cover ... We are now still living with the 6 per cent core inflation consequence. It is common – including in the rare Bank charts – in New Zealand to want to compare New Zealand with the other Anglo countries. But what the Bank has never acknowledged – and just possibly may not have recognised – is much larger the boost to domestic demand happened in New Zealand than in the US, UK, Canada or Australia. And domestic demand doesn’t just happen: it is facilitated by settings of monetary policy that were very badly wrong, perhaps more so here than in many of those countries."
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