Graeme Wheeler, Policy Pioneer, America’s Cup – Wait, What?

There is an interesting article over at Bloomberg that looks at Graeme Wheeler’s first year as Governor of the Reserve Bank. But then something really, really stupid appeared:

Policy makers are preparing for an economic recovery even without the additional boost that could have come from a win by Emirates Team New Zealand in the 2013 America’s Cup. A Kiwi victory might have boosted confidence and housing demand in Auckland, home to about a third of the country’s 4.5 million people, as it would have become the venue for the next defense of the sailing title. Oracle Team USA overcame New Zealand’s lead to win the contest this week.

On a scale of 1 to 10 derp, that’s a 10 in my book. In terms of “economic impact”, disregarding all costs borne by ratepayers and taxpayers in hosting large sporting events, even oil exports are several orders of magnitude higher each year in terms of economic impact against hard to calculate, often negative, returns on big sporting events.

The confidence fairy is a bit of a silly indicator. You might be really confident about the prospects for the New Zealand economy, but that doesn’t mean you’re going to change your consumption or investment patterns. It’s almost as silly as asking what you think about the weather – you have things that need to get done in your firm regardless of whether it’s raining or not.

We have to remember that the world markets get their news from Bloomberg. If it seems like there is no criticism of the macro-prudential framework, then the impression is that there is no criticism of the macro-prudential framework. There are unintended consequences of the Reserve Bank’s press releases being rewritten without critical inquiry.

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