ON THE WATER
NEELS BLOM: Reserve Bank must raise interest rates to close the wealth gap
Zuma and those who jog along with him may have stumbled across a nation-saving idea: radical economic transformation. It may surprise, but even the action of fools and thieves will sometimes fructify. It isn’t clear what the ANC means by radical economic transformation, but it doesn’t take much imagination to know it’ll be more of the same, only with greater vim. Finance Minister Malusi Gigaba’s line that we "need to grow the economy and grow it inclusively" is meaningless. But if we assume it means the economic order must change, it is a good idea. The existing order – a kind of centrally planned state capitalism in which low interest rates cause high inflation – serves an increasingly exclusive and rapidly shrinking club of wealthy people. Its main quality is that the middle-class people — those who sustain what little economic growth there is through conspicuous consumption and tax — will shrink until they, too, are poor.The Reserve Bank does its best to maintain a balance betwee...
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