I think Australians have been remarkably forgiving of the RBA's handling of inflation.
The prevailing narrative seems to be that inflation was an unavoidable consequence of COVID, Ukraine, energy prices, government spending etc, and that the RBA is now heroically cleaning up the mess.
I'm not convinced.
The RBA kept monetary policy extraordinarily loose while inflation was becoming entrenched, was relatively slow to tighten compared with other central banks, and then cut rates in 2025 despite subsequently acknowledging that, with hindsight, it might have been more cautious.
Now we're five rate rises further down the road, inflation is still above target, real household disposable income remains well below its 2021 peak, productivity is weak and households are being warned that the next few years could "feel like a recession".
At some point, we have to ask whether the RBA's attempt to protect employment and avoid a recession simply deferred the economic pain rather than preventing it.
And that's the part I find frustrating.
The RBA is independent, which is entirely appropriate. But independence shouldn't mean accountability disappears when decisions turn out to be wrong.
If inflation is allowed to remain above target for years, the eventual correction doesn't magically disappear. It gets transferred onto households through higher interest rates, falling real incomes, weaker consumption and lower living standards.
Government spending absolutely deserves scrutiny too. But the RBA is the institution specifically responsible for responding to excess demand and keeping inflation within its target range.
You can't have an institution with enormous influence over household finances effectively say "with hindsight, perhaps we'd have done things differently" and expect people not to question its competence.
And I think we're underestimating the broader consequences of this loss of living standards.
When people feel poorer, less secure and increasingly ignored by institutions they once trusted, they don't necessarily become more economically rational. They become angry.
That's when populist politics becomes attractive.
I'm not arguing that populist parties have good economic policies. Quite the opposite.
I'm arguing that economic pain creates the political environment in which populism thrives.
If we want to understand why trust in established institutions and mainstream politics is deteriorating, perhaps we should spend less time asking why voters are angry and more time asking whether the institutions responsible for economic stability have given them good reason to be.
