I happily confess to knowing little about monetary policy, but I'm sure most people would agree that our dollar is overvalued. It's great if you're in the market for a new car or TV, but not so good if you're an exporter.
The other problem with our dollar is its volatility. It's high now, but the bottom could easily drop out of it tomorrow.
The reasons why our dollar is so high at the moment, and why it is historically volatile, are complex. But one of the main problems with our dollar is the fact that it is one of the most traded currencies in the world.
I know, it seems mad, and yet it's the truth. Speculators love our dollar.
A lot of this currency movement has nothing to do with the inherent strengths or weaknesses of the New Zealand economy, but instead has more to do with what is happening elsewhere. Low interest rates in a particular market may lead traders to buy more New Zealand dollars, while a downturn in another part of the world might lead nervous investors to send their money back home. It's unpredictable, and there's precious little that we can do about it. Or so it seems to followers of orthodox monetary policy.
The followers of this orthodoxy will tell you there's no point in playing around with the Reserve Bank Act, and that we'd be fools to do anything at all to control our currency. The currency markets must be our master, and we must just accept our fate.
I don't know if Russel Norman's plan to print more money to bring the dollar down makes any economic sense, nor do I know whether Labour's proposal to amend the Reserve Bank Act to give the Reserve Bank more powers will make any difference.
On the other hand, I cannot help but observe that a great many of the followers of the current orthodoxy also believe strongly in deregulation generally, and letting the market take care of everything. It seems to me, therefore, that the current orthodoxy deserves to be scrutinised. The speed with which many commentators have shot down the proposals by the Greens and Labour suggest to me that many of our so-called experts are trapped in a mindset of thinking that the government has no business interfering in our economy, and that we must go where the markets take us.
As I said, I am not an expert on monetary policy, but nor are many of those commentators currently taking the mickey out of Russel Norman. Some of them probably know less about quantitative easing than I do, and yet you would think they were experts, the way they opine so passionately.
I don't have the faintest clue how to manage the dollar, and I freely admit to that. But I don't accept that doing nothing is any sort of solution. The same people who say do nothing have been telling us for years that the government is the enemy of business and that we should deregulate everything, and then when the global financial crisis showed the folly of deregulation their only response has been to demand more deregulation, as if a stronger poison might somehow bring about a miracle cure in the patient.
So if these so-called experts think any sensible person would take their word that nothing can be done, then they really are dreaming.