By Bernard Hickey
Every parent knows that there's always a moment near the end of the party when the five year old has had enough chocolate cake, or the 18 year old has had enough cans of vodka and Red Bull.
Saying no to their pleas for 'more, more, more' is never an easy moment, but it's what a responsible adult does.
That adult knows that everyone will be better off in the morning.
The kids will feel better and they won't have wrecked the joint on their sugar and alcohol highs.
New Zealand's economy is at that point in the party where it's time to take away the chocolate cake and the cans of vodka and Red Bull.
Former US Federal Reserve Chairman William McChesney Martin coined the phrase that it was the central bank's job to "take away the punchbowl just as the party gets going," by putting up interest rates to slow down inflation.
He was talking in 1950s America in an era of bobby socks and slicked back hair. Back then people actually drank punch and inflation did have a habit of spiking.
Now it's time for New Zealand's own grown ups to take away the cans of alcopops from home buyers before they 'wreck the joint' and give themselves and the economy an almighty hangover.
There may not be the inflation pressures people saw in the 1950s, 60s and 70s, but there are real risks to financial stability if an over-valued housing market goes bust.
Reserve Bank Governor Graeme Wheeler spent most of the last decade in America watching just such a housing bust and the financial carnage that followed. That's why he is now collecting the unopened cans and turning on the lights with his plans to slow down rampant low deposit mortgage lending.
Thank goodness, because it seems as if all the other grown-ups have lost their senses and want to keep handing out the sugar and alcohol.
Prime Minister John Key made a spirited last-ditch attempt to keep the party going by asking Wheeler to give first home buyers an exemption, which luckily seems to have failed.
The disappointing news this week was both Labour and the Greens also called for the Reserve Bank to exempt first home buyers.
They couldn't resist using the situation to try to score some political points off Mr Key, saying he had handed a 'loaded gun' to Wheeler by allowing the bank to create a macro-prudential tool kit that didn't exempt first home buyers.
They also couldn't resist the easy appeal to the kids to keep drinking and 'Party on you young dudes!'.
Just when the Reserve Bank needed some support in an attempt to slow down the housing market and avoid the financial fallout of a possible bust, National, Labour and Greens took the cheap, easy and 'cool' option.
They acted like the middle-aged parents who wanted the teenagers to still think they were 'cool' by turning up the music and showing off their best More FM mix of dance moves from the 70s, 80s and 90s.
It's never a good look at a party and it's not a good look now.
Any political party who really wants to look after the best interests of first home buyers shouldn't be encouraging them to gear up to their eyeballs with currently easy and cheap debt.
Those first home buyers who have never experienced a sharp rise in interest rates or a fall in house prices will wish in years to come that someone had warned them and been the grownup at the party.
The sole grown-up in the room needs some help to turn off the stereo and send the kids home, not an unseemly display from a bunch of half-cut fifty year olds wanting to jiggle the night away.
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This article was first published in the Herald on Sunday. It is reprinted here with permission.
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