I must admit to being a little bit surprised to see the strong trend downward on this graph. It suggests that there has been a consistent strategy to lower and stabilise inflation over the last forty years. Judging by the trend it has been a very successful one.

I can recall a historian saying, "it doesn't matter who the leader is as long as the strategy is correct."

That is my paraphrasing. It was in relation to the constant civil wars during the Roman Imperial period where a new Emperor was being established every few years but the Roman boundaries continued to expand.

The historian was arguing that the military strategy was correct and as long as the emperors stuck with it this made the 'who' of the emperor position immaterial.

The converse is true as well. We look to leadership to lay out a coherent and consistent strategy. Thomas Ricks on Iraq:

It was a moment that captured in a nutshell the weakness at the core of the Bush Administration's national security team: Strategy was seen as something vague and intellectual, at best a secondary issue, when it fact it was the core of the task they faced. ...

By failing to adequately consider strategic questions, Rumsfeld, Franks, and other top leaders arguably crippled the beginning of the US Mission to transform Iraq.

One of the benefits of coherent and consistent strategy is that it permeates the decision making process at all levels - other than just the leadership. It makes for a common goal as well as a knowable and discernible set of milestones along the way. Ricks writes dramatically:

A confused strategy can be every bit as lethal as a bullet.

More discussion of Australian economic policy/strategy at troppo's graphaturday.
More reading: Tags, Inflation, Policy, Strategy
Cam Riley: South Sea Republic. Freedom, liberty, equity and an Australian Republic.

Comments
  • Tony G . # . 1/1
    "It suggests that there has been a consistent strategy to lower and stabilise inflation over the last forty years"

    IMHO, government strategy has little to do with it. The chart mirrors the the rising level of deflation exported to western developed countries by China's cheap manufactured goods.
    • cam . # . 1/1
      Inflation targeting is actually a fairly new 'doctrine' which New Zealand adopted in the 80s. Basically it is where inflation alone is targeted and the idea is the rest of the economic stuff such as growth, investment, employment, etc will improve as a result of stable monetary policy. That approach has become the norm now. Australia followed NZ in doing it that way.

      The China Effect is pretty recent and certainly doesn't extend back into Fraser's time. I cannot recall China being that big an exporter even in Keating's time?

      'Sworn to no party, and of no sect am I.' Frederick Vosper's republican motto.