With my colleagues in the media excessively preoccupied with Treasurer Joe Hockey’s budget deficit reduction problems, I am more concerned about what could be our biggest economic problem — WOMEN!

Now I don’t want to be sexist here. In recent times, the definition has been broadened, but as I’m an economist, I think I might be able to get away with this discrimination for economic recovery purposes.

Let’s get out of dangerous territory quickly by revealing a little-exposed revelation in the Westpac consumer sentiment number released yesterday.

Despite the usual preoccupation of the media telling us that pessimistic consumers are outnumbering positive ones for a long time, the facts are that the index rose in November by 1.9% to 96.6. When it reaches 100, the pessimists will equal optimists, so we want to see it get over 100 ASAP.

A quick way of making this happen would be for the Government’s key economic ministers — PM, Treasurer and Finance Minister — to get on all of the talk shows and mainstream news and stop scaring the pants off women in particular!

The Westpac/Melbourne Institute research found that men, with an index reading of 97.6, are still more optimistic than women, who are at 95.6. But there are some better signs as the ladies index rose 3.6%. Men on the other hand, who have been more optimistic for some time, only rose by 0.1%.

Phil Ruthven, who founded the internationally respected IBISWorld research house, once pointed out that women are critical to economic growth. He jokes that they can cause recessions because their spending is more sensitive and reactive, while men tend to be steady spenders.
Other research shows that often women are the household money managers and they’re good investors, but they are much more cautious than men.

The American consulting firm, Rothstein Kass, found that hedge funds led by women outperformed the global hedge fund index by miles in 2012. In fact, hedge funds run by women made an 8.95% return, while the global hedge fund index returned 2.69%. That's well over three times higher returns compared to male-led funds. (www.womensagenda.com.au)

Of course, I don’t want to be a finger pointer and blame women for our sluggish economy, because there are many reasons why cautious investors and spenders are refusing to take big risks, but many of them are being deprived of lots of the good economic news out there because they don’t make gripping headlines.

Economists don’t help by being excessively cautious, which the media quite rightly will run with, but it then gets consumed by normal media-addicted Australians — call them consumers and business owners — and it ultimately affects confidence readings, as well as actual spending.

Even the scariest economist in the world, Steve Keen, who is now Head of the School of Economics, History and Politics at Kingston University, London, says the Treasurer needs to get the economy growing to get the deficit down, and he should forget about spending cuts, at least while the economy is subdued. And this comes from a guy who is railing against too much debt right around the world!

Joe, Tony and Mathias need to get in touch with their feminine side and constituents, if only for economic reasons!

(In case you’re wondering, no big issues for stocks with the Dow Jones index down by almost three points while the S&P 500 index lost 0.1%.)