Anti-Tanking Policy in Media

Standard

It’s been a monumental week for me in the media – the anti-tanking policy story is beginning to get some real traction in the newspapers, specifically: (i) Beverley O’Connor in the Herald-Sun (p.23); and (ii) Greg Baum in The Age (pp. 58-59), both on Wednesday 19 February.

In addition to this, I had two Melbourne radio interviews: (i) 3AW (Drive with Tom Elliott on Monday 17 February); and (ii) SEN (Hungry for Football with Kevin ‘KB’ Bartlett, Thursday 20 February). I have the audio file for the latter – e-mail me if interested.

I have been pleasantly surprised with the positive feedback I have received on my Anti-tanking policy for the AFL Draft, rather than the pugilistic resistance that hard-core sports fans are notorious for sometimes.

More generally, it’s nice to see economic research (and its contribution to policy) getting airtime and a good reception from media.

I will be presenting the findings soon at some seminars: internally at La Trobe (6 March); Economics Society, Victorian Branch (12 March; and University of South Australia (19 March). Anyone is welcome, but please tell me if you would like to attend, so that I can notify the conveners.

Advertisements

Appearance on ‘Stay Tuned’

Standard

I appeared on the ABC3 teen-oriented music program Stay Tuned on September 14, discussing fame in the music industry.

WATCH ON YouTube

Liam Lenten on the teen-music variety show “Stay Tuned” on ABC3 (season 2, episode 17), using elements of his study (with Jordi McKenzie, University of Sydney) on determinants of JJJ Hottest 100 success, to help hosts Joel Phillips and Nicole Singh answer the question: “Who is the Most Famous Person in the Music Industry?”.

Not Everyone Wins when Interest Rates Fall

Standard

[Archived from: The Conversation, 1 May 2012]

In the likely event that the Reserve Bank Board chooses to ease the target cash rate by 25 (or even 50) basis points later today, it is almost guaranteed that all of the major daily newspapers around the nation will provide an overwhelmingly glowing assessment of the Board’s monetary policy decision on behalf of the Aussie battlers, who will breathe a collective sigh of relief.

Indeed, we may be treated to headlines reporting a cut analogous to “RBA Christmas Cheer”, the likes of which we saw after the last rate fall in December last year (also in the same month of 2008, 2001 and 1998); we may even see cartoons depicting Glenn Stevens as and the other Board members in a very flattering light.

The tendency of media outlets, print and otherwise, to almost unambiguously characterise interest rate decreases as good and increases as bad ensues irrespective of whether such a decision is truly the best call to maintain inflation within the target band and ensure full-employment in the medium-term.

However, not everyone will be celebrating, should it comes to pass as predicted. We need only to refer to the basics of credit markets for this to become apparent – contrary to popular belief; interest rate cuts (likewise increases) create both winners and losers.

Specifically, when banks pass on a rate cut to their customers, it benefits borrowers – even those with a smaller amount of savings. However, it is to the detriment to net savers, whose returns on those savings fall. Could it be that most columnists fall into the former category?

As for the argument that a fall in market interest rates is supposed to be good for future economic activity, the danger is that market rates may already be lower than the optimal levels for medium-to-longer term growth. If so, the current injection of economic activity produces heavier recessionary pressures later, not to mention the threats of inflation and economic volatility.

The disclaimer is that in reminding readers of this, I am someone who would like to own their own property but, for the time being, feels having been frozen out of the home ownership market by significant past price rises fuelled by more aggressive (but arguably less-creditworthy) borrowers. Hence, one falls into the net saver category.

As schadenfreudian as it may sound, I would personally love to see a rate rise this afternoon, followed by further hikes in the coming months, until defaults in credit markets clear out all the suckers who should not have outbid me in each of those auctions in the first instance. Then, property prices will return to levels consistent with the underlying fundamentals.

The lament that one feels about the asymmetric media coverage is that it seems to pander predominantly to the significant proportion of their readership that are net borrowers, and increasingly so: the 2006 census revealed that 64.8% of all private dwellings in Australia were owner-occupied, down slightly from 66.4% in 1996.

More strikingly, the proportion of these properties owned outright declined significantly over that decade, from approximately 62% to 51%, which in turn means that more homeowners have mortgages. The impending release of data from the most recent census in August last year will shed further light on this emerging trend.

The balance of power may be starting to change, however, with the ranks of self-funded retirees set to expand in the coming years, as the baby boomers begin to retire in greater numbers, combined with a higher propensity to save for retirement by successive generations of workers.

Should demographic change eventually bring about such redistribution in media consumption influence from borrowers to savers, then media providers may think twice about how they spin their coverage of interest rate changes and monetary policy generally.

In the meanwhile, net savers should to be reminded that they can exert their influence by sending letters to the editor of their favourite newspaper, demanding that the reporting of such issues be more objective to both sides of the balance sheet.

UPDATE: The Reserve Bank of Australia has cut Australia’s official cash rate by a larger-than-expected 50 basis points, to 3.75%.

‘ABC News Breakfast’ Newspaper Segment

Standard

Another ABC News Breakfast newspaper segment (filmed Monday last week, 6 February) discussing the typical range of stories in the news that day, with Michael Rowland and Karina Carvalho.

WATCH ON YouTube

Liam Lenten – on ABC1 News Breakfast again, sharing thoughts on mining barons in the media, Gillard leadership speculation, Super Bowl advertising and Thierry Henry back on the EPL scorers’ list.

Hottest 100 on ‘ABC News Breakfast’

Standard

I appeared on ABC News Breakfast again this morning, but not the newspaper segment as previously. Rather, I was discussing my Hottest 100 project (details below), with Paul Kennedy and Melissa Clarke.

WATCH ON YouTube

Liam Lenten interviewed on ABC1 News Breakfast about his study (with Jordi McKenzie, U Sydney) on voting biases in the Triple J Hottest 100, on the day before the results of the 2011 installment are counted down on the youth radio network.

My Appearance on ‘ABC News Breakfast’

Standard

I appeared News Breakfast (ABC2 and ABC News24) back in January (6th) with Michael Rowland and Mary Gearin discussing the Queensland floods, retailers campaign against online competition, changes in the RBA Board, and Australia’s hosting of the 2015 Asian Cup. Only managed to upload it recently…enjoy!

WATCH ON YouTube

Liam Lenten on ABC News Breakfast, 6 January 2011 discussing four of the more newsworthy items of the day.