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Published 17 May 2012 05:11, Updated 17 May 2012 13:46
If Chris Caton were not chief economist at BT Financial Group, he could have had a career as a comedian.
At least that’s the theory held by another well-known market economist, Saul Eslake, chief economist at Bank of America Merrill Lynch Australia. “It’s very difficult being next to Chris on a panel because he steals all the limelight,” he says. “He’s a great public speaker. If he retires as an economist he could get a job in stand-up comedy.”
Caton, who has been dubbed the Seinfeld economist by another colleague, is flattered by the comments. “Perhaps if I gave up comedy I could become an economist,” is his true-to-form response.
Caton and Eslake are part of a new breed of “rock star” economists riding a trend that has helped make mundane economic news part of kitchen table conversation and, dare we say it, sexy. Growing super fund balances and the lasting impact of the financial crisis have made interest in the global forces that influence money paramount.
“Australians are hungry for economic news,” says University of Ballarat senior lecturer in economics Alex Millmow.
That hunger isn’t just related to bread-and-butter issues such as mortgage rates, petrol prices and the jobs market. Debate on whether we need a budget surplus is now on the front pages of newspapers.
So how did we become so obsessed? Some say it all started with former prime minister Paul Keating. His “banana republic” and “recession we had to have” comments made economics newsworthy.
Societal changes have also had an impact. As we’ve amassed more property and wealth (or, for some, more debt) our fascination with interest rate movements, the rise and fall of sharemarkets and the global economy has grown.
“The economy is like the air: you don’t think about it until you can’t breathe,” says professor of economics and finance at the University of Western Sydney Steve Keen. “Now that economic prosperity is no longer a given, suddenly economics is important.”
Recent events have galvanised interest in the economy and in economists. That may reflect a fear that the government isn’t communicating what’s really going on. Westpac chief economist Bill Evans says economists are in demand because of the quality of news they deliver.
“The feeling I get is it’s a lot tougher out there than the authorities believe and than what’s implied by the official statistics,” he says. “That’s really what’s important to people – what’s going on behind the official data.”
As interest in the field has grown, so have budgets for hiring economists as headline speakers. Rock stars in the sector can command hefty speaking fees, though market economists’ fees generally go to the company they work for. Caton is among those who can charge more than $6000 for a 40-minute presentation.
“Economists are keynote speakers in their own right,” says Saxton Speakers Bureau managing director Winston Broadbent. “They used to be a support act but now we have the likes of Chris Caton, Chris Richardson, Craig James and Phil Ruthven (just a few of many economists on the Saxton pay list) who have earned the right to speak and have extraordinary bonds with the audience.”
Some don’t just provide wisdom; it’s also entertainment. Tim Harcourt, the self-proclaimed airport economist (it’s the title of his book and television series) likes to embellish his PowerPoint presentations with pictures of beautiful famous women he’s met during his world travels (model Megan Gale has been known to feature).
The former Austrade economist is willing to go where most economists don’t dare. He was asked to dance the samba at a recent Melbourne business event – and obliged. He is now working for the University of NSW on a mission to become the “Dr Karl of economics” (the university employed him in the hope he would do for economics what Karl Kruszelnicki has done for physics).
“The idea is to get people who don’t like economics, rather than preach to the converted,” Harcourt says. “Taking the serious stuff and making it a bit lighter.”
Some have become famous for simply going against the trend – and sooner or later making the right call. Evans, dubbed “big call Bill” by BRW – last year was the only economist who correctly predicted a rate cut in 2011. Former Macquarie Bank interest rate strategist Rory Robertson won the title of “rate cut Rory” for correctly predicting a series of 50 basis point rate cuts in the mid-1990s.
Others have become known for their forthright economic views, especially when at odds with those held by our political leaders. Former treasurer Peter Costello tried to get Eslake sacked at one point during his 14-year tenure at ANZ Banking Group for questioning the integrity of some of the Howard government’s accounting policies.
Eslake says his “less than stellar relationship with Costello” became more evident on budget night each year. He’d begin by reeling off a very short list of things that the two have in common (they are both AFL Essendon supporters) before criticising Costello for wasting unprecedented mining boom revenue on income tax cuts for high income earners.
Others have made it big overseas by making unconventional (some say far-fetched) predictions – and sometimes being right. Doomsayer Keen has for years been saying Australia will plunge into an unparalleled recession due to our exorbitant household debt levels. The author of Debunking Economics believes overly large debt-to-GDP ratios, such as those in Australia, will cause deflation and depression. Calling himself a “non-mainstream” economist, he is one of just a handful who correctly predicted the global financial crisis.
“When the crisis happened, they had to listen to me,” he says. Now he’s a global star, with regular appearances on the BBC. Even those who dispute what he says, such as Nobel prize winner and New York Times columnist Paul Krugman, still write entire blogs on his views.
Despite their ability to entertain, the accuracy of their forecasts is what really matters in the end. “You have to be careful about getting too carried away with style,” Reserve Bank of Australia board member Heather Ridout says. “Ultimately the audience is interested in the key messages that come through.”