For all practical purpose Mervyn King is a a civil servant. He’s also onbe who has over stepped the mark. Civil servants do not contradict their ministers.
He’s wrong on other counts. He’s so god at economics he did not see the weaknesses in his regulatory system. He did not see the crash coming. He kept interest rates up when they should have been cut. He did not see the importance of supporting jobs when Danny Blanchflower did. So why is he right now?
Why is he right now when his prescription is for more unemployment, no greening of the economy and prolonged slump. Why is he right now when his inaction is designed to preserve the status quo for the City that has failed the UK economy? And why is he right now about fiscal policy when he has never had any real belief in it?
Ignore the man I say. Sack him, better still.
And as for what to do on April 22 — lest we forget it, budget day — the answer is simple. We do need a fiscal stimulus. Not less than £25 billion. But I accept not all should be paid for by debt. Minimum tax rate of 32% on those earning more than £100,000 — removing all allowances to achieve this is a start. Make it 40% minimum tax on all earnings at £200,000. Charge NIC at 11% on all investment income over £5,000 pre annum (pensioners apart). Abolish the domicile rule. Introduce a rule that all UK citizens are UK tax resident and taxable on world wide income unless living permanently in a country with a double tax treaty with the UK — and can prove they pay their tax there. Bring in a General Anti Avoidance Provision. Bring in a Stop Tax Haven Abuse Act. And so on, and on.
Oh yes, we can afford a fiscal stimulus. There is ample money available. We just have to chose who should pay for it. Some of us have the answers. Gordon Brown should be listening.
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You seem like a professional person but this article seems little more than a rant on your part. I suggest that you keep to being professional if your side of the views are to be taken seriously on here.
I agree with some of sentiments and I personally have much time for Blanchflower’s opinions and views but your unashamed bashing of tax haven’s is wearing a little thin I must say.
With reference to your Stop Tax Haven Abuse Act I guess you are referring to the Levin driven bill which has recently been presented which has very little support at present. The bill that does seem to have a little weight to it is the Max Baucus alternative which appears to have support from Geitner.
If the US and the rest of the G20 etc could get organised and come to a consensus then perhaps a level playing field could be achieved.
BOE to PM: UK economy is DOA…
A few days ago the Guardian mused editorially:
Is austerity all you have to offer, Mr Cameron?
Today the Bank of England governor answered the Guardian’s query:…
Danny Blanchfower, the former Northern Ireland footballer? He’s been dead a decade, but even so who might tell us what his views on interest rates might have been.
this article seems little more than a rant on your part.
The situation and the ongoing mismanagement would drive any sane observer to rant. It is however factually accurate. Mervyn is a typically blinkered cleric, cyclopically focused on the demon of inflation (as it is chosen to be measured) and all at sea when events require him to do more than nudge interest rates every couple of months.
As he said in 2004:
“Over the past year,the Bank has been able to reflect on the changes stemming from the Bank of England Act 1998 and the associated Memorandum of Understanding between the Bank, Treasury and FSA on financial stability. That legislation inevitably changed the Bank’s relationship with the City and the financial sector more generally. Freed from the responsibilities of day-to-day regulation,the Bank has been able to focus on two principal objectives: maintaining monetary stability and maintaining financial stability.”
Focusing (or rather obsessing) on the abstract ideals of the latter two, while neglecting the former, has led to the breakdown of all three. Though I suppose the freezing of credit to productive areas of the economy is a kind of stability.
As he smugly and ignorantly said in 2007:
“Your decision to grant independence to the Bank of England ten years ago is widely and rightly regarded as a fundamental improvement to the conduct of economic policy in this country, and we in the Bank are grateful to you for giving us the opportunity to demonstrate the benefits of an independent central bank.”
I’m sure mr Murphy will stop banging on about tax havens when they no longer exist. I don’t think he’s doing it to entertain you or anybody else.
The latest bailout in the States is very much seen as the last chance saloon with no plan B if, as is likely, it fails. American politicians and increasingly, the American people are waking up to this – the is a chance that Obama presidency might be failed before it has even begun.
Meantime on our side of the pond, Gordon remains in denial and plans to spend more money we don’t have – interesting that today is the first ever instance that a UK gilts auction failed.
As long as the leaders of the western world approach the problem with measures that are equivilant to trying to ‘cure the alcoholic buy giving him a case of whisky’, I will remain gloomy.
Peter
Peter
You have a very short memory
A failure to sell gilts last happened in 2002
And many times before that too
Richard
[…] have been some howls of outrage, and some blog-blasts calling for King’s head, but criticism from the Labour Party itself has been strangely muted. […]