The Governor resigns. Not before time. [Updated]
It was no surprise that news of Alan Bollard’s forthcoming resignation from the job of Reserve Bank Governor was followed almost immediately this morning by calls to “shake up the monetary policy.”
Directly out of the blocks before the starter’s gun was even trousered was Ganesh Nana from BERL, never backwards in coming forwards when it comes to being proved an idiot, who opined that the new governor “needed to be ‘actively involved'’ in all avenues of economic policy setting”—in other words, not just focussing on interests rates as a means by which to attempt to control inflation, Bollard’s replacement should be empowered to pull every lever he can find in the pursuit of every policy objective he (or Mr Nana) might think of.
This was bad enough. What was worse, however, was to hear the response of former Reserve Bank Governor Don Brash to this rank stupidity. Not what he said about how no foreigners need apply for the forthcoming job. Sadly, that sort of provincialism is now par for the course in this pathetic authoritarian backwater. (Just ask the receivers of the Crafar farms.) No, it was how Brash had the boldness to say that monetary policy, when focussed only on” keeping inflation under control” by manipulating interest rates, has “worked very well.”
“Worked very well”?
'Here we sit in 2012, not half-a-dozen years since an orgy of malinvestment and a world’s record housing bubble was inflated in every developed country by the policies of their central banks—the popping of which in large part caused the depression which we are still enduring—and we have a former central banker telling us that the policy that played a leading part in this disaster (a policy that, in the name of a non-existent price stability, spatchcocks together an unstable mix of rampant monetary inflation with a stuffed-shirt bureaucrat dictating interest rates) has “worked very well.”
What a crock.
That a stuffed-shirt bureaucrat is unable even to do this job well, let alone what Messrs Nana, Hickey, Morgan et al would like them to, should be apparent just from the record. But if you want to see just how far from “on top of things” these central bankers are, , just how far from being “experts” these these desiccated economic dictators are, just read the now-released 2006 transcripts of the US Federal Reserve Open Market Committee, i.e, the shysters who “oversee” the economy. These morons don’t have a clue what they’re doing. They really don’t. It’s just laughable. Page after page of “what bubble?” “aren’t we great!” and “can I get the same retirement plan as Alan.”
Or read Alan Bollard’s own book Crisis, which reveals him and his so-called “experts” permanently engaged in a game of “What the Fuck is Going On Out There?!” If there was one “expert” whose record was exploded by the global financial collapse it was surely Alan Greenspan. And if there was a chook with its head cut off during the global financial crisis, it was Alan Bollard.
The point is not that we need better experts in charge. The point is that the people in this job don’t lead the markets at all. Despite their now-exploded claims to omniscience, they just dictate to markets what they will pay for money while staying inside playing catch-up. As I’ve been at pains to point out here at NOT PC over recent years, it is their attempts to lead the market however that caused and causes such calamities as we are now enduring—and will continue to endure as long as the alleged experts continue to insists that things are “working well” [Brash], or that central-bank-based solutions to recovery can be found and acted on [Bernanke].
Not true. Not possible. As The Privateer says in his latest newsletter [hat tip Louis Boulanger],
“Before even a hint of a genuine recovery can take place, there has to be recognition of what it is that the financial world must recover from. What the financial world must recover from is a system whose vital components - money, prices and interest rates - are all controlled by edict and not by the voluntary interaction of people exchanging goods and services in the marketplace.”
I’m all for “changing the role of the Reserve Bank governor. I’m all for “shaking up the policy settings” of an economic dictator who has no place in a free market.
But what I’d like to do is give him less work, not more. Radically less work.
And I wouldn’t even mind if it was a foreigner who was paid not to do it.
The Libertarianz Party is asking John Key to consider postponing and possibly cancelling any replacement for retiring Reserve Bank Governor Alan Bollard, ...