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Speaker 1: Now we need to talk about the Reserve Bank's excuses

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Speaker 1: for how it completely stuffed up its job and let

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Speaker 1: inflation get away on it during COVID. We spoke about

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Speaker 1: this on the show yesterday. It's done the review. It says,

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Speaker 1: quote in hindsight and earlier and more aggressive tightening might

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Speaker 1: have reduced inflation sooner. Yeah, rarely, Sherlock. But this would

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Speaker 1: have been difficult given the data available at the time. Now,

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Speaker 1: basically what they're saying is, yeah, we could have done

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Speaker 1: better if we could see what was happening at the time,

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Speaker 1: but we couldn't see what was happening at the time.

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Speaker 1: Which is a croc, isn't it? Because there were people

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Speaker 1: who could see at the time what was happening, and

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Speaker 1: they said so, they said it publicly, they said the

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Speaker 1: Reserve Bank needs to start tightening up. In some cases months,

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Speaker 1: if not even more than a year before they did.

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Speaker 1: I mean, the New Zealand Initiative first identified that COVID

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Speaker 1: could cause inflation in April twenty twenty two, that's a

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Speaker 1: year and a half before the Reserve Bank started tightening.

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Speaker 1: Brad Olsen called on them to start lifting the OCR

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Speaker 1: in July twenty twenty one. That's about three months before

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Speaker 1: they started. They started in October twenty twenty one. Now

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Speaker 1: that's good on them for at that point starting to move,

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Speaker 1: but they were doing it. They were pumping the brake

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Speaker 1: ever so slightly while still pushing the accelerator in a

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Speaker 1: big way. Because they did not stop pumping the economy.

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Speaker 1: They kept their cheap money for banks program going all

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Speaker 1: the while. In February twenty twenty two, the following year,

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Speaker 1: the New Zealand Initiative was warning like, hey listen, this

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Speaker 1: inflation is a thing here, but that lending continued, That

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Speaker 1: cheap money to the banks continued all the way through

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Speaker 1: to December twenty twenty two, when it stopped. Inflation was

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Speaker 1: already at seven point two percent, which is nuts. Now.

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Speaker 1: To be fair to the Reserve Bank, it wasn't just

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Speaker 1: their fault. Grant Robertson was doing a fair bit right.

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Speaker 1: He was spending like crazy, and even though he was

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Speaker 1: worn by Treasury, he just kept on spending too. But

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Speaker 1: that doesn't exonerate the Reserve Bank. It just makes their

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Speaker 1: job harder. But they cannot pretend that they didn't see

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Speaker 1: what was happening, because others did see what was happening,

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Speaker 1: and they needed to see what was happening because that

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Speaker 1: is what they are paid for for. More from Heather

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Speaker 1: Duplessy Allen Drive. Listen live to news Talks it'd be

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Speaker 1: from four pm weekdays, or follow the podcast on iHeartRadio