Greens Senator Calls for “Pause” to Rate Rises, Has Four Properties, Four Mortgages.
Yesterday I was shocked to see the deputy leader of the Greens in the senate, and their “economic justice spokesperson” call for a “pause” on the RBA’s rate hikes. That would be a handout to asset owners at the expense of the poorest members of society, who would see their incomes hit hardest by unchecked inflation.
My first thought was that The Greens had been overly influenced by Modern Monetary Theory, which advocates for low or 0% interest rates (paired with other lending controls). But when I posted in my current favourite subreddit about it someone pointed out that there is a simpler explanation: He owns four homes.
I checked, and they were absolutely right. Not only does he own four properties, he is still paying them all off, so every rate hike directly hits his back pocket. Obviously I can’t see into the senator’s soul and determine his true motives. But actually, neither can he. This is why conflicts of interest are so insidious, they give politicians a subconscious bias in favour of certain policy positions. In this case, McKim is siding with those who own assets of all classes, and those who have debts. He also happens to be in both those categories of people.
In his statement McKim said the reserve bank had indicated previously that rates would not rise till 2024, and that “hundreds of thousands of people were induced into taking on massive debts on this basis,”.
I also speculate that disproportionately represented in that group are educated urban professionals of the millennial generation, who are a major greens constituency. While these people are not the masters of the economy, and have no doubt made significant (and foolish) sacrifices in order to enter our insanely overpriced housing market, they are far from the most underprivileged members of society.
Truly poor people don’t own homes, and if interest rates stay super-low, then asset prices, including housing, will stay super-high, and they never will. Meanwhile inflation will further shrink their meagre incomes.