Shopping centre magnate Frank Lowy steps down from the Reserve Bank Board on December 9, and a party is planned in his honour. I have a lot of time for Lowy, not only for giving money to kickstart our premier international relations thinktank, but also for his own personal story (one of the most moving speeches in Michael Fullilove’s recent collection is by Frank Lowy).
But it does raise the question: why on earth does Australia allow monetary policy to be set by a board mostly comprising people whose businesses are interest-rate sensitive, rather than by professional economists, as the US does?
(And please, don’t give me the "but everyone has a mortgage" line.)
Update 1: Mark Bahnisch raises a similar problem – the re-review of ARC grants by people with no apparent expertise in the topic areas.
Update 2: Stephen Kirchner refers to the rumour that former Liberal Party Treasurer Ron Walker may be appointed to replace Lowy, and argues that "the main qualification for most Board appointments will remain a lack of expertise in monetary policy".