Mervyn King: Political Hack
It is perfectly right and proper, and indeed necessary, to have a rational discussion on fiscal policy. Government debt, the size of both public spending and the tax burden are the matters that should be discussed by rival politicians of the left and right.
However it is simply not acceptable for the Governor of an independent Central Bank to wade into this area.
It’s not his job. The quid pro quo of the Government not interfering in monetary policy is that central bankers stay out of fiscal policy. The issue is not the rights or wrongs of what the Governor has said. The issue is that he has spoken on this issue at all.
This is the second time in a year that Mervyn King has strayed from this basic principle.
The charitable interpretation of his last entry into the fiscal debate was that it represented not an attack on Alistair darling but an attack on Danny Blanchflower. Given Blanchflower is no longer on the MPC this excuse no longer holds any water.
The Governor has now firmly placed himself in the political area and is acting as a political figure. This is very similar to Alan Greenspan’s last years in office, especially his vocal support of Bush’s tax cuts. As Harry Reid, then Senate Minority Leader, said in 2005 Greenspan had become “one of the biggest political hacks we have here in Washington.”
The Governor is now a political hack. I honestly hope that there is no connection between his attacks on the Chancellor and the Tory plans to expand the Bank’s role. I also hope that the fact that George Osborne’s chief economics advisor (Matt Hancock) is a former Bank economist who used to be Paul Tucker’s (the current Deputy Governor) private secretary is not relevant.
But these questions have to be asked. When you behave like a political hack, you get treated like one.
On a side note I submitted the following FOI request to the Bank on the 26th May and am still awaiting a response:
I am writing to make a Freedom of Information request.
Could I please details of any meetings between Bank staff (especially the Governor, Deputy Governors and other executive level staff) and representatives of the Conservative Party (MPs, Peers, MPs’ and Peers’ staff and other employees of the Conservative Party) over the past 12 months?
Could I please have the dates of such meetings, any minutes or papers prepared for them and a list of attendees (from both the Bank and the Conservative Party)?