Larry Williams Drive

Can I give you a positive spin on the recession that we're just coming out of? I mean, maybe it's not so much a positive spin, but maybe it's an explanation for why this recession was harder than it needed to be - but why it actually did need to be this hard. If you've been following the commentary around the Reserve Bank's last two OCR decisions, you'll know there's been a fair bit of chat about the wealth effect and how that has made the recession worse. Now, the wealth effect is the thing that happens when your house goes up in value. You feel rich - you’re not rich, you just feel rich - so you go out and spend more money. And then, of course, when it does the opposite and goes down in value, you feel poor. You're not poor, you just feel it, so you shut your wallet. And that is part of the reason why this recession has dragged - because our house prices are not going up. They have gone backwards, and so we're not spending, which means that we're not spending our way out of the recession. Now, the thing abo