The only reason why the governor of the Bank of England has stayed in post must be a proper and mindful sense of his duty to remain until this regime has finished its dirty work destroying the long term interests of the British economy. Had he resigned in the face of the behaviour of the Westminster prime minister Brown and his puppy dog Chancellor the fat would truly have been in the fire immediately. As it is some pretence of the proper conduct of an economic and financial policy can be kept up and there remains some hope that meltdown can be avoided.
A very fine economist indeed, Mervyn King is now further distinguished for speaking the truth about moral hazard and the undertaking of unnecessary risk which has been accompanied by the greed of those who pursued their own interest (and bonus) to extremis. He is now bearing the opprobrium of political choices made by those answerable to no-one, the Westminster Labour party Executive, presumably because he subscribes to that old-fashioned notion of political duty and public service that Brown wouldn't recognize if it bit him in the bum.
Not that King needs Angels to defend him.
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4 comments:
King of Kings
But not necessarily For ever, and ever ?
Not at the Bank of England ND, no. Why bother with it?
Bastards all. Not apropos of this post, HG, but most apropos of the fear of Gorgon, article in the Indy today
http://news.independent.co.uk/uk/politics/article2979925.ece
ends with a Labour MP noting that the conference has already been stitched up.
As I said. Bastards all.
Mind you, central bank independence is not all that's cracked up to be.
It is a recent invention, circa 1987; we managed very well without it before and after.
It is based on the unreasonable belief that there is no trade off between inflation and unemployment, so that we can safely delegate the control of inflation to monetary policy by an independent central bank, while the government takes care of employment.
Maybe the trade-off between inflation and unemployment is small, but is not neglible. Little or even no trade-off in the long run, maybe, but certainly not in the short run where we always and continuously live.
And there are large scale costs from the lack of co-ordination between fiscal and monetary policy: higher interest rates, stronger exchange rates and more unemployment than could be the case if the Treasury and the Bank could work together.
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