‘THE UK economy has shrunk for the second consecutive month amid spiralling living costs.’ Negative headlines such as these on the state of the economy dominated the news at the end of last week, coming hard on the heels of the Organisation for Economic Co-operation and Development (OECD) warning that Britain’s GDP is set to flatline in 2023, and its economy in the worst shape of any of the G20 bar sanctions-hit Russia, and the Governor of the Bank of England warning of ‘apocalyptic’ food prices.
As the stock market started to plummet and the BoE hiked interest rates to 1.25 per cent I sat down with George Cooper, author of The Origin of Financial Crises, fund manager and TCW writer, to discuss the role and responsibility of the Bank of England in this latest financial crisis.
The problem, as identified by Cooper, goes far deeper than a sluggish BoE still being behind the curve. The only solution to it, he concludes, is to bring the Bank back under Government control. This is the only way to make it and the Government accountable and reverse the expansion of the state by reapplying essential cost benefit analysis to projected spending.
You can listen to the whole conversation here.
‘We have moved into a system where the Government has abandoned ay idea of balancing the budget. It has gone cap in hand to the Central Bank and said, please print money and they have. The result is no discipline in public spending. The £100billion cost of HS2 pales into insignificance by comparison with Lockdown, where the current estimate of £400billion is just for the Government sector. Add in the private sector and the money the government was already spending – e.g. on schools, but not using it, and we are looking at a trillion pounds for Lockdown.’
‘There’s been a generation of central bankers of whom Mark Carney is a key figure who’ve been instrumental in focusing away from monetary policy – from its actual purpose to steering it to align with a set of very politicised decisions . . so when Covid and Lockdown came along no one stood up and said ‘what is the cost benefit analysis?”
‘What we’ve done in the last decade or do is wreck the private sector in all sort of ways but mainly culturally. The private sector is frightened to admit its purpose is the pursuit of profit – it’s allowed to pursue all sorts of other goals. By contrast the State is extremely confident – Lockdown being the biggest symptom of that – confident enough to decide to shut down the whole economy!’
‘The irony of the Central Bankers is that they like to see themselves as the paramedics attending a car crash . . . but they don’t step back and see that they were the drunk driver who caused the car crash . . ‘