In case you’re wondering, the most memorable Reserve Bank boss ever, Dr Phil Lowe, probably only has two full months left in the job. That’s ironic that the man whose job it is to take away jobs from Australians to demolish a persistently high inflation (created partly because Scott Morrison, Josh Frydenberg and the State Premiers who wanted to keep people in jobs during the pandemic lockdowns) will now probably lose his.

Be clear on this: I like Dr Phil and know he’s a smart economist, who’s a very well-trained economist than most of his critics — both pro economists and man-in-the-street ‘bush’ economists.

That said, even the well-trained economist can make mistakes when it comes to ‘guessing’ inflation, unemployment, economic growth, trade deficits and pandemics! Dr Phil copped some of biggest curve balls I’ve ever seen in my 30 years or so of public commentary. Let me remind you:

1. The Coronavirus pandemic.
2. The lockdown of the Australian and world economy.
3. The crash of the stock market as we locked down.
4. JobKeeper and the Schwarzenegger-style stimulus thrown at economies to save jobs, businesses and people’s very minds!
5. The local and global inflation all this created.
6. The cash rate of interest taken to 0.1% to get people to borrow to avoid a Great Depression.
7. The low interest rates that encouraged people to borrow on fixed rates, such that now 40% of loans are fixed, when once it averaged around 15%. This means Dr Phil’s monetary policy is less effective because when he raises rates, those on fixed rates say: “So, what? I’m going overseas, despite the high cost of travel!”
8. After inflation hit 7.8%, now unions are asking for catch-up pay rises, which makes the fight against inflation a lot harder for Dr Phil than many of his predecessors. That includes the likes of Bernie Fraser, who copped it in 1989 with high inflation, the “recession we had to have and Paul Keating as his Treasurer and later his PM!
9. The current Labor Government is the most supportive for wage rises than most governments in recent times.
10. The economy he’s trying to work out and steer now has a new curve ball, in workers wanting to work from home.
11. Younger workers today are very different from previous generations and are less likely to play ball with their bosses, which must be having a productivity effect, along with this work-from-home ‘demand’.
12. A potential US banking crisis, which raised ghosts of the financial meltdown we saw in the global financial crisis (GFC).
13. He even had to cope with the economic implications of the China-Trump wars that put a fair bit of economic and market volatility into his work.

As a consequence of most of this, inflation has remained high. Dr Phil has tried to kill it using the most aggressive interest rate policy ever, but monetary policy works with a lag, and this lag has been lengthened because so many people have fixed rate home loans.

Unfortunately for Dr Phil, his job is up in early September, and while Ian Macfarlane and Glenn Stevens won three-year extensions to their seven-year term, there seems to be an appetite to cancel Dr Phil’s ticket and get a new face for the RBA.

Luckily, this new governor won’t have the mistaken call about interest rates remaining low until 2024 hanging over their head. Also, luckily for them, they might be known for their rate cuts rather than rate rises, because by later this year inflation will be falling and we’ll be worrying about a recession.

I also think a new RBA boss will be a plus for consumer confidence and that will be needed by year’s end as the economy slows under the pressure of those big rate rises.

So, who’s on the list of candidates who could be the new RBA boss that Treasurer Dr Jim Chalmers will appoint? And are they any good?

The top two candidates must be the Deputy Governor, Michelle Bullock and current Treasury Secretary, Steve Kennedy.

Bullock has been at the RBA all her working life and wouldn’t have got to Deputy Governor if she wasn’t any good. Her speeches are well-reported by the media, and no one has picked her as a dummy, and she has often revealed ‘stuff’ about the economy and us that made good headlines.

Bullock is a potential leader in an area where many of her predecessors have done only OK jobs. And there’s a history that a Deputy Governor becomes Governor though it hasn’t always worked that way. Keating went for Bernie Fraser, who came out of Treasury. That could be good news for Steve Kennedy.

Steve Kennedy was the main man with the Morrison Government’s JobKeeper and was important for rescuing the economy from a pandemic-created economic depression. He’s seemingly worked well with Dr Jim Chalmers. If he is the favourite for the job, I suspect there’d be many in Government who think it’s time for a woman to run interest rates in this country.

There is another woman vying for the job, Jenny Wilkinson, who’s Finance Department secretary and has worked at the RBA. Apart from her economic training and brains, she has one big plus going for her — she wasn’t on the board when Dr Phil made his ‘rates will remain low until 2024’ prediction. That board should have had the guts to make him backdown from that promise by 2021, but they didn’t. Bullock and Kennedy were on that board.

Interestingly, Wilkinson’s husband, economist and the country’s top statistician at the ABS, is a possible candidate but I think he’s an outsider.

An American-based Aussie economist called Justin Wolfers has been mentioned but I see him a 100/1 shot. That said, he has form as this blurb from the University of Michigan tells us: “He was recently named by the IMF as one of the ‘25 economists under 45 shaping the way we think about the global economy.’ Wolfers' research focuses on labor economics, macroeconomics, political economy, law and economics, social policy and behavioural economics. Beyond research, he is a contributing columnist for The New York Times, appears frequently on TV, radio and in print.”

If I was Dr Jim, I’d keep my Treasury Secretary and give the job of RBA Governor to Michelle Bullock, but I like the idea of someone new like Jenny Wilkinson. As an economist, I think the RBA needs new blood, but I suspect politics will prevail and Bullock will be our next Governor.