Sunday, 21 April 2013

In which an ex-central banker inadvertently explains what's wrong...


John Gieve, opining in the Financial Times, manages to capture what's wrong in his headline:

Who is in charge of the British economy?

This is a revealing question since it assumes that Mr Gieve and his ilk were - indeed are - somehow "in charge" of the economy. Think for a second what we mean by "the economy" and the sheer hubris of this man's belief becomes apparent. The British economy consists of the choices made by nearly seventy million people and millions of business. It's the sales made by the corner shop, the decision we make about this year's holidays or whether to go to B&Q or IKEA.

Yet this ex-central banker, undaunted by the scorching of his feathers as he flies ever closer to the sun, says stuff like this:
...the UK is now pursuing three macroeconomic objectives – steady growth, low inflation, and a stable supply of credit – with three sets of policy instruments. In the long term, the goals are compatible. But in the medium term there may be trade-offs. A new framework should explain how and by whom those trade-offs will be made and how the three sets of policy tools will be combined to best effect.

Impressive stuff I'm sure you'll agree. But it's wrong and not just because it's barely comprehensible. It's wrong because only a deranged idiot would think he (or a claque of him and his pals) can run the economy. It is this outlook that is causing all the damage - this stupid belief that there are a set of levers in the Bank of England that if pulled in the correct order will usher in an era of growth, prosperity and prizes for all.

All the rest of us going about our lives buying, selling, sleeping, eating and dreaming, we didn't cause the problem. It was caused by people like John Gieve who, despite all the evidence, still believe they know better. They don't know better and no one is in charge of the economy (unless you're in North Korea).


1 comment:

Hugh Tillinghast said...

John Gieve was the fifth-rate parasite running the Home Office up to 2005 (?) and was parachuted into the BoE as a consolation prize for being exposed as completely useless by the Audit Commission.

Failure has dented neither his arrogance nor his stupidity. Rest assured, he will retire (has retired?) on a generous pension provided at the expense of the taxpayers for whom, I'm sure, he reserves his patronising contempt.

His career and that of his fellow senior public "servants" have provided lifetimes of service which are, to say the least, less than distinguished when measured in outcome for the rest of us but stellar in terms of their own personal rewards.