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RBA Governor Glenn Stevens is the man who really runs Australia
Topic Started: 4 Aug 2012, 11:10 AM (2,747 Views)
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Economist or Ax-man? RBA Chief Almost Chose Musical Path

December 9, 2013, 12:58 AM
By James Glynn

Australia’s central bank governor Glenn Stevens was almost lost to economics in his youth.

A central player in the nation’s successful navigation of the global financial crisis, the soft-spoken 55-year-old admits he once faced a crossroads, wondering if guitar — not economics — was his true calling.

“At one point in my life I had to decide to get more serious (about guitar) or more serious about economics. It is obvious which course I chose,” Mr. Stevens told The Wall Street Journal in a recent interview.

In the late 1970s Mr. Stevens, who claims to have had shoulder-length hair at the time—this couldn’t immediately be verified — questioned his future while studying guitar and jamming with friends to the day’s rock hits.

“We didn’t actually have a band with a name, but some people liked Led Zeppelin, some people liked Deep Purple, some people liked Black Sabbath. Somewhere in there we discovered Eric Clapton, ‘Old Slow Hand,’ ” he said, with an air of reverence for the former Cream frontman.

Despite the group’s metal repertoire, Mr. Stevens denies he had a rebellious streak.

“I was never a hardcore rocker. It’s all a bit too loud,” he said.

Instead, he was drawn more to the rhythms and chord progressions of jazz.

Mr. Stevens’ father, an engineer for Qantas, would often return home from overseas flights with gifts for his son, including a Fender Stratocaster guitar and an amplifier. Mr. Stevens still has a 1974 Gibson Les Paul guitar in his collection.

In the end, the opportunities and security of a career in economics trumped the uncertainty of life as a musician. Mr. Stevens’ guitar teacher also told him the path to greatness meant practicing for 12 hours a day, a level of discipline he thought was beyond him.

Today Mr. Stevens is one of the most powerful men in Australia, managing interest rates and monetary policy as head of the independent Reserve Bank of Australia since September 2006.

Australia’s economy, the 12th-largest in the world, hasn’t suffered a recession in 23 years but is misfiring a bit these days. A decade-long mining boom is fading, weighing on growth and pushing up unemployment. The economy grew 2.3% on-year in the quarter to Sept. 30, sluggish by Aussie standards.

The RBA has set interest rates at a record low 2.5% while it waits for a full-blooded recovery. But signs of recovery so far are tentative, and the central bank won’t rule out further rate cuts.

Mr. Stevens’ command of interest rates in a country obsessed with property ownership and speculation makes him highly recognizable to the public. During an interview with The Wall Street Journal he wears a cap and sunglasses, but a couple at the next table recognize him and the finger-pointing begins.

Mr. Stevens has invited The Wall Street Journal on a flight aboard his private, six-seater light aircraft. But the main purpose of the 90-minute flight from Sydney to Wagga Wagga, a large farming community in southern New South Wales, is to transport a young mother and her seriously ill son, who has been getting medical treatment in Sydney that is not available in the Outback.

Mr. Stevens is a regular contributor to the Angel Flight charity, where pilots volunteer their services and aircraft. Clearly weary, the mother is deep in her own thoughts and seems oblivious to the importance of the person at the controls.

For his part, Mr. Stevens is more than happy to be just an anonymous pilot, fussing about the comfort of his passengers as the plane breaks above the clouds gathering over Sydney.

“Is there anywhere in the world you would rather be?” he asks as the plane reaches clear air at around 9,000 feet. Staying on top of everything from fuel consumption to weather patterns, he ticks off each navigational beacon the plane passes with the satisfaction of a school boy.

Mr. Stevens clearly enjoys getting away from the rigors of his day job. The predictability of the flight systems stands in sharp contrast to Australia’s economy, which in recent years has been whipped around by the collapse of Lehman Brothers in 2008 and then by a surge in commodity prices and the Australian dollar.

Mr. Stevens laments that “unlike the economy,” he knows what will happen to the aircraft if he applies full flap ahead of landing.

Returning to Sydney, Mr. Stevens executes a flawless landing and taxis home. But as he reviews the flight, he chastises himself for a minor error when dialing navigational information into the autopilot.

It’s that attention to detail and willingness to admit that things might have been done better that has lifted Mr. Stevens to the top of Australia’s central bank.

Read more: http://blogs.wsj.com/economics/2013/12/09/economist-or-ax-man-rba-chief-almost-chose-music/
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