We have, in short, done absolutely nothing to prepare for what is coming. We have pretended it's not happening in the hope that something will come along.
None of this is new but I wish to make two points today. First, this week has shown that despite our denial, the adjustment is accelerating. Throughout the last three years, MacroBusiness has argued that we face a long and arduous period of below trend growth because of our multiple adjustments. And so it has proven to be.
Despite a brief spike in growth in 2011/12, the post-GFC period has been the lowest average growth period anyone can remember. We are now growing more slowly than the supposedly broken United States. This week's national accounts illustrated why very clearly. The terms of trade correction which is central to the adjustment is pulling down national income.