I never intended to become involved in debate on the independence of the Bank of England, but my promotion of People's Quantitative Easing resulted in my being so.
As many will know, I have problems with the very idea that the Bank of England should be seen as independent of the Treasury. The management of both fiscal and monetary policy requires that in practice that this not be the case if any notion of integrated policy making is to be sustained.
That an unelected authority should make decisions of the significance that those that the Bank of England apparently does without proper accountability is, in my opinion, unacceptable in a democracy.
But many disagree with me: they say such independence is vital if monetary policy is to be appropriately managed. Well, maybe: except that I do not think that is the limit of the remit that Bank really wants.
My doubts and concerns have been heightened by Mark Carney's recent comments. Of course climate change is important. And so to is the UK's position in Europe. But should someone who is a regulator with responsibility for UK monetary policy really be commenting on them in public? Could any other public servant do that?
Or has Mark Carney really revealed the next aim of those seeking to promote central bank independence? Is it really the plan that central banks should be the countervailing power to democratically elected politicians?
Have we just seen the first announcements of Prime Minister Carney of the City of London, the UK's real state within a state?
If so, what now for those democrats who have long been worried about the power of the City of London within the UK?
And does John McDonnell's new panel reviewing the BoE mandate really have the right brief in that case?
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I think you hit the nail on the head there. The problem with independence of the BoE, which should also fall within the review of the remit, is how much air time a bureaucrat (the BoE governor) actually gets in the press.
This independence brings a huge influence, as this “virtual messiah” status is all of a sudden attributed to the BoE governor, just because he is independent. His speeches are scrutinised, his view are commented upon, newspaper articles are written about it, and it drowns out real news.
Really, we do not need to know his views about Europe or climate change, they are not more valid than mine or yours. What matters should be the views of elected politicians.
It is a great failure of the press to attribute so much power to someone who just runs, arguably, an institution not fit for purpose (the BoE cannot get inflation rates to 2%, cannot regulate the banks to make them easy too fail, cannot set rules for splitting investment banking from retail banking until 11 years after 2008!)
So who cares what a civil servant says, who heads a failing institution, to be polemic about it. It should not really be reported at all.
But it just shows that all what matters is finance in the UK, the fact that Hinkley Point C has been signed which could have been financed at one third or half the price with deficit financing does not feature.
(Cannot read that anywhere in the press today, apart from my blog:
https://radicaleconomicthought.wordpress.com/2015/10/22/hinkley-point-c-worst-deal-ever-huge-profits-for-ruthless-china/)
It is a debatable question where the power really lies between the City, BoE and Treasury and in some instances they obviously work together. This link gives further background information. This time Rowan has written in rather colourful language!
http://rowans-blog.blogspot.co.uk/2015/10/jaccuse-george-osborne.html
I have a lot of respect for that
Good article but:
“I say ‘unwittingly’ because I do not believe he is doing this maliciously, he is doing it because he simply doesn’t know any better. ”
Not so sure Rowan has go that right – these people know what is going on but also know that it is all untouchable-as long as it’s ‘private’ money who cares what suffering and social injustice lies behind it.
Sorry, not really Prime Minister, more Viceroy.
Why is it I can’t get the song “Like a puupet on atring” out of my head?
http://www.youtube.com/watch?v=qhLlXvkm65Y
The vested interests in the Square Mile and its adjunct at Canada Wharf are like the Mike Myers creation “Me” and “Mini Me” working hard behind the scenes…
The City of London Corporation has long been involved has been influencing what happens in Parliament. The Remembrancer’s has more influence than officially admitted too: http://www.cityoflondon.gov.uk/about-the-city/how-we-make-decisions/Pages/key-officers.aspx. And in reality, the UK has never been a true democracy, just an illusion of one.
English laws for England…..hmmmm
More like England uber alles…
Looks like more Tory gerrymandering.