Originally Posted by Pass-a-Frozo
Or did you prefer it when back in 1990 US interest rates where 8.25% and Australian interest rates where 17%??
There's a very interesting Boyer lecture transcript from former reserve bank governor Ian Macfarlane about the 1990 recession and all the speculation about who or what was to blame. Even Keating's stupid remark gets a mention, although in a perverse sort of way, it was basically true (still a very dumb thing to say to the electorate though). The whole situation was rather more complex than "Labor - bad, Liberal - good", and even most economists hadn't really decided what monetary policy should really be trying to achieve at that stage.
Part of it, for example, was to do with very heavy gearing in the corporate sector persisting right through the late eighties, Macfarlane stating that its borrowing was still rising at 17% PA in 1989 despite rising interest rates! GDP growth was strong (5%), as was domestic demand (8%).
Of 17 larger OECD countries to have a recession in 1990 (only one didn't), 10 of them had an even bigger fall in GDP than Australia. Australia was very much in the middle of the field, with Canada, New Zealand, UK and other european countries being worst affected, and the US (as you implied), Japan, and a couple of luckier European countries being less affected than us.
So, dumbing down the argument for political purposes doesn't really reflect the full (or even real) story, though we tend to see this done ad-nauseum in right-wing commentary in the papers, etc.