I have just posted this on Twitter, and I am not sure that there is much to add.
Two members want change. The rest want to maintain the status quo. They should get on very well with Rachel Reeves' Treasury.
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If the US Fed reduces interest rates, will the Bank of England be “forced” to reduce interest rates?
I have no idea so I am asking the expert?
No. There is latitude. But there are also obvious linkages: these people talk to each other and influence group behaviour.
In May 2001, inflation was at 2%, the same as today.
In May 2001, the Bank of England interest rate was 0.1%. Today it is 50 times higher at 5.25%
If the well-off were earning £1000 a year then, they are now making £50,000/yr today. This is profiteering / extortion.
The Bank of England does not work for the benefit of the people. This is neoliberal predatory capitalism.
Do you mean 2021?
Mea culpa, yes I do mean 2021.
Then it makes sense
So we have one arm of the state forcing people into the labour market, and another making sure there aren’t enough jobs for them.
I think it was Warren Mosler (not that I always agree with him) who described it as burying 8 bones, sending 10 dogs to find them, and beating the 2 that don’t find anything.
Like blaming the person who is last in the queue for not being quick enough.
Or blaming nurses who complain about their jobs, and telling them that they should get a better-paid job.
Helia Ebrahimi, the Economics Correspondent for Channel 4 News interviewed Any Haldane tonight. It is astonishing. Haldane argues broadly that growth needs investment, and the serious drag on Britain is – the Fiscal Rules. In a hilarious interview, in which Haldane appears to be presenting himself as a fresh, independent, radical outsider with incisive ideas, untouched by the old hacl conventions; the Fiscal Rules are holding us back; the rule that requires debt falls in the fifth year requires to be ditched, and the focuse needs to be on investment in schools, infrastructure projects effectively.
He isn’t finding all that in the mainstream economics departments in the universities, the Treasury, the BoE, or the think tanks (he must be reading this Blog, Kelton, Wray et al; surreptitiously in the dead of night).
He didn’t actually say the 90% ceiling on Debt to GDP was nonsense; but it falls out of his argument. What is the point of this? Is this the people responsible for the mess created by idiotic, unsubstantiated debt/GDP ratios, or arbitrary, incoherent Fiscal Rules that obvious;y do not work (the current politicians, BoE bankers, Treasury economists and officials, daft politicians) ; who have built their career on not being found out; and when faced with being found out – are going to transform themselves into completely different experts, fly false flags, and pass themselves as always having had the opposite opinions to those they used to make their sorry careers (The Past? Nuthin’ to do with me Guv!).
I am still trying to figure out what is going on; but I can smell the snake oil.
Good post Mr Warren.
We can never be privvy to “the club” & its thoughts – in which interest rate decisions are influenced & made. What is certain is that most of the placemen are there because they are “a safe pair of hands” they “go with the flow” and will not dissent. Modest variations in views are permitted. Those that vary too much get ejected (Greece – that is what happened to Varoufakis) from the group. It is a “system”, a black box if you like – we can look at inputs and outputs, surmise functionality and draw conclusions – which is what this blog does, much of the time. But the motivations of the people inside? impossible to know and for the most part, like the old SovU politburo, they only even speak in code & are rarely if ever confronted with the consequences of their actions. Perfect neo-liberalism. If the curtain was pulled to one side, a la Trajan in the temple – we would see that there was nothing there, the whol edifice rests on nothing.