While collecting links for my previous post, I came across this quote from Minister for Financial Services and Regulation, Joe Hockey.
In 1930 the Bank of England sent Sir Otto to Australia to help us work through our financial problems caused by the Great Depression. The result was that Sir Otto Niemeyer had a profound impact on our recovery.
So profound, in fact, that the Depression was still in full swing when World War II broke out nearly a decade later.
It turns out the Hockey was announcing the inauguration of a “Sir Otto Niemeyer” scholarship at the Australian Graduate School of Management, supported by
• The Commonwealth Treasury;
• The Reserve Bank of Australia;
• The Australian Prudential Regulatory Authority;
• The Australian Competition and Consumer Commission
• The Australian Securities and Investments Commission and
• The Australian Bureau of Statistics.
This is an absolute disgrace, and all of these institutions should be ashamed of themselves. I doubt that anyone in Australian history has caused as much economic hardship as Otto Niemeyer.
Moreover, there was no question of error in his actions. Niemeyer knew that, if the British banks he represented were to be receive repayments of their loans (overvalued thanks to deflation) Australian living standards would have to fall, and unemployment would have to rise. He delivered precisely that outcome. He had previously done precisely the same in Britain, having been the leading advocate of the disastrous return to pre-war gold parity in 1925.
John Quiggin 
OK, that’s it: the economic history wars have been declared!
Just think, if the British civil service examiners of 1906 had known more economics, Keynes would have come first in the exam instead of Otto, and hence would have displaced Otto in going to the treasury instead of the India office, and all subsequent economic history may have taken a different path, including Australia’s.
It seems we’re once more to be instructed on how to assume our proper imperial subordinancy. That noise you just heard was Nugget, spinning in his grave. Fancy Australia’s own reserve being part of the ignominy!
Niemeyer savage sado-monetarist policies are one of the reasons why Banks were, for so long, hated in Australia and other countries .
This Niemeyer was nothing more than glorified re-po man sent around to foreclose on national mortgages. Equivalent to sending in the bailiffs.
Chiffley’s plan to nationalise the banks was not good competition-friendly economic policy, but it was politically pretty popular amongst Depression-wounded people who wanted payback.
That Niemeyers reputation is enjoying a come-back amongst these august institutions is a terrible commentary on their ignorance of Australian social history, never mind Keynsian economic theory.
How does one make such a huge error, anyway?
(It’s not as if they’d mispelled “fall” as “full”, which is an easy mistake that any economist may commit… ;-))
Fixed now, thanks
Thanks for reminding us of this, John. I remember being stunned at the appalling ignorance of Hockey and the sponsers in seeking to honour such a scourge.
Or was it ignorance so much as reflecting a return to the neoclassical orthodoxy sponsored by Neimeyer?
Schedvin’s “Australia and The Great Depression” should be compulsory reading for all of them.
Niemeyer has never been forgotten in Canberra. Until quite recently (and maybe still), Treasury and the Department of Finance put together a monthly report on Commonwealth expenditures, called the Niemeyer Statement.
If “words truely fail you”, try say nothing. it’ll be an improvement.
we makes an eloquent case for IP banning.
‘we’ seems to want to challenge little tim as prize nitpicker among the blogs.
Perhaps there’s a dyslexic problem. He has an extra ‘e’ in ‘truly’, and one missing from his name.
Now I have not studied this for a while, but I seem to recall that the Premier’s Plan did draw on some key points of Sir Otto – such as across the board wage cuts and some other deflationary measures.
Never had nothing to do with blog, till ABC RN’s Sandy McCutcheon’s mention of it tonight, in which John Quiggin’s website was touted.
My 1st impression: forgive me, but part of what I’ve just read have mere chat-room features, and the rest, the subject matter, that of Niemeyer, happened such a long time ago, it’s wildly irrelevant. I hope this isn’t a trend?
Regards, John Mason
Pretty classy chat room though.. and the past is always waiting to come back.
Perhaps if we had not forgotten just how much work went into building public institutions from the rubble of their private forebears, we might have been more cautious about selling them off today.
Now I am off to catch a new-fangled electric train. My own private Monash memorial.
Steve,
I’d say that what was good in the Premiers’ Plan (devaluation) was adopted against the wishes of Niemeyer, and what was bad (most of it) was in line with Niemeyer.
The only person of note to stand up to Neimeyer’s policies was Jack Lang. He was no saint but he knew that the enormous burden of these payments to British banks would come from the pockets of ordinary Australians, already hard hit by the Depression.
Neimeyer is the kind of person you name a satirical award after. What about taking it up Mr Quiggan. Use your site to hand out an annual Otto Neimeyer Award for Economic Irrationalism?