An interesting concept, The Blue Cross. But I don't think it will fly.

>>The 'old paradigm' of the RBA setting rates should have been dropped years ago, to be 'free market' consistent.<<

When you think that one through, I think you'll find that the concept of completely "free market" interest rates would be highly damaging. With all the export earnings sloshing around the economy at the moment looking for a home, inflation is a very real possibility. Particularly when key overseas markets will need to continue to operate at a rate close to 0%, simply in order to keep things moving at all.

The RBA has a mandate, described in the 1959 Reserve Bank Act

"It is the duty of the Reserve Bank Board, within the limits of its
powers, to ensure that the monetary and banking policy of the
Bank is directed to the greatest advantage of the people of
Australia... in such a manner as... will best contribute to:

(a) the stability of the currency of Australia;
(b) the maintenance of full employment in Australia; and
(c) the economic prosperity and welfare of the people of
Australia."

It's motherhood, of course, but someone has to do it.

I guess the decision comes down to "whom do you trust"? The financial markets, or the government?

Much as it pains me to say it, in this particular instance I would suggest that the commercial instincts of the open market would rapidly override any considerations of "the economic prosperity and welfare of the people of Australia".

We'd find ourselves as a Provincial Economic Zone of China quicker than you could say Guangzhou.

Pericles, I hope it does not, but I was trying to highlight the falsity of the idea of 'grassroots Liberals' existing anymore.

They really cannot have it both ways, anymore than the 'Fabians' of the ALP, both of whom believe absolutely in 'the free market' but get upset when banks move rates above the RBA settings, wages for 'wurkers' rise beyond the required 'below inflation' levels of EBAs, while the hoary old falsity of peanuts vs. monkeys is applied to CEOs packages.

If we want a 'free market', lets get on with it and drop all constraints, including WHS, environmental safeguards, border controls, wage controls, do away with health systems, publci schools, roads railways, housing, taxes, everything that holds back the purity of 'the market'.

Or, let's stop being silly and talking about 'free markets' at all, and get back to the serious task of living collectively within an acceptable framework, which is one that will always be 'under discussion' rather than 'fully formed' I suspect.

A 'mixed economy' might be a starting point.... regulations that are policed a good follow up, curbs on excess, including on interest rates, is not a bad idea.

But Hockey demanding them shows he has gone gaga and forgotten he is not a Fabian but a neo-liberal, like all of the rest of them in Cardinal Abbott's gang.

Not sure what your point is Blue Cross. Of course there is a Liberal grass roots. That's why Malcolm Turnbull was ousted as leader. They didn't support his climate change policies. They were unhappy with Abbott's parental leave scheme, but he got away with that one.

They're not as numerous as they used to be, and they are older, but they definitely exist.

As for a free market in interest rates - we've essentially had that for decades now. Governments nudge them around via repurchasing rates and expectations of increases in money supply, but when you can borrow in any currency anywhere and take the interest rates that apply to that currency, then you have a pretty open market.

A large proportion (maybe most) of our bank debt is sourced internationally. They accept whatever rates they have to so that they can get the deposits. And they have to pass them on.

Graham

Maybe, not being a Liberal myself, I saw the ousting of Turnbull, who seems to be more 'liberal' than Liberals want, as evidence that there were no liberals left, and therefore no Liberal grassroots.... in the sense that Menzies liberal Liberalism is dead and gone.... as has Chifley's notion of 'Labor' gone down the plug 'ole too.

When Fraser left, that was it, so I thought.

Of course, if the new Liberals are all grassroots neo-Liberals, that is another matter.

But maybe a new name is needed?

TBC I believe you are wrong, conservatives like every party have grass roots.
And in time Abbott will fall due to these grass roots.
The idea however that Hockey put forward is from the heart of confrontation for confrontation sake.
A great amount of conservative public statements are as silly as this.
Turnbull is the next leader and conservatives next Prime Minister.

Perhaps the biggest mistake that the liberals made, was not
realising that they needed Costello to stay around, more then
Costello actually needed the job.