Most of the economic babble is a smokescreen for the fact that "wealth extraction" industries that contribute nothing to the real wealth of nations have been allowed to get too fat, too fast.
Think about it: When thousands of bankers, Wall St traders and others make multi-million dollar annual salaries and are allowed unlimited scope to minimise their tax...who is paying? Where does the energy, materials and skill come to house, feed, cloth and fly them around the world? Is *any* job valuable enough to justify a salary that would set a normal person up for life after 1 year?
Rampant profiteering based on an artificial price of funds has denuded the economy. Bailouts and unlimited bank profits (paid to execs and shareholders, *not* retained to make them safer!) have cost the real economy dearly without fixing any structural issues.
So we can talk about government spending, monitory policy, etc, but so long as we allow fraudulent profits from unproductive industries, and corporate welfare for non-viable industries then the real economy will suffer.
Competition works to maximise utility only when profits are minimised as a result. If not, then high profit "industries" like banking, trading and insurance are just a fat-cat tax on the real economy without the transparency nor controls of government taxation. Allowing folks to get rich from what amounts to legal Ponzi schemes *will* damage the wealth of the rest of us non-criminals!

"Highly relevant warnings from people with the runs on the board were ignored, and the reputation of the RBA was only saved by the onset of the global financial crisis. Even so, the CPI shocked on the upside in reaching 5 per cent, dangerously in the red zone."

Surely the lesson from that period was that the RBA raised rates too high. It had to embark on a massive, emergency easing of monetary policy when the GFC hit!

The global economic surge that stoked Australian inflation was partly driven by unsustainable credit growth. It was an illusion. Just because few people saw the collapse coming, doesn't let the RBA off the hook.

Some would argue the strength of the Australian economy now is illusory, yet the bank is too obsessed with short term movements in the terms of trade and is not seeing the fragility of the global economy (sovereign debt crises and a Chinese slump my main worries)

Even worse, Labor has trashed the budget and can't come to our aid on the fiscal side if GFC II hits..