Mr Carney’s agenda


The Chancellor reported a surprise to Parliament yesterday. He announced that after all, and after the denials, the Head of the Canadian Central Bank, Dr Carney, will be the next Governor. Labour agreed with the appointment

, and the Chairman of the Treasury Select Committee who gets to interview him as well more or less accepted that he will be the next Governnor. I send him my congratulations.

I am pleased the Chancellor did not appoint one of the figures who has been responsible for the Bank and the FSA’s conduct in recent years, as it is difficult to make the case that they have done a good job. Let us hope that Dr Carney will bring new thinking and greater purpose with him from the new world. He is Central Bank Governor to a smaller country that has its own currency whilst trading substantially with a much larger neighbour. He has never, along with the Canadian establishment. suggested Canada should join the US dollar, nor proposed a pooling of sovereignty as part of their single market arrangements with the USA.

More importantly, Canada got through the last few years without major banking disasters. Canada lost less output and recovered more quickly. We have things to learn from Canada’s relative success.

My only worry at the moment about this appointment is the timing. Dr Carney remains Canada’s Bank Governor until May 2013. He takes up post here in July 2013, and may not start taking decisions or making major contributions until the autumn of next year. I think we need new thoughts and new policy now from our central bank.

On his agenda should be the following questions:

1. How do we restore the commercial banks to health more quickly, so they play a role in economic recovery?

2. How much more, if any QE is advisable?

3. How long should interest rates penalise savers, and damage pension fund liability calculations?

4. How does the Uk get a grip on inflation?

5. How does the Bank work to promote low inflationary growth?

Readers will know my answers to these questions. I look forward to hearing Dr Carney’s answers when he appears before Parliament, when I will give you an update.

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  1. lifelogic
    Posted November 27, 2012 at 6:48 am | Permalink

    Indeed, a great shame about the delayed start, hopefully he will set the direction by remote control before then. Mind you the next election seems to be lost already so it will just help Labour after 2015. Perhaps he could first start by telling the government in robust terms that his job would be far, far simpler if taxes and government expenditure and waste were reduced and reducing. Get government expenditure down from circa 50% of GDP in the UK to about 39% as in Canada for a good start. That might raise maximum tax revenues at least.

    Then set an aim of getting it down to 20% which is about the optimum for maximum good for the maximum number of people. That would give an uplifting vision to the country and promote much growth by itself.

    • lifelogic
      Posted November 27, 2012 at 6:56 am | Permalink

      While he at it, perhaps he could get the UK 10 year bond yields down from nearly 2% to say 0.5% like the Switzerland. Perhaps he could even persuade Cameron that a Greater Switzerland is perhaps not such a bad vision to hold.

      • zorro
        Posted November 27, 2012 at 9:12 am | Permalink

        You are having a laugh, Cast Elastic doesn’t even need to explain why he thinks that a ‘Greater Switzerland’ would not be a good idea!


        • lifelogic
          Posted November 27, 2012 at 11:18 am | Permalink

          He clearly feels he does not need to explain but what possible arguments would he put? Perhaps he has a phobia of heights, yodeling or cuckoo clocks.

          Or may be he just thinks people would not like being half as rich again, having better health care, a strong currency, low interest rates, functional banks, control of resident rights and lower crime rates – or perhaps it would just not be good for them.

          Perhaps he could tell us?

          • Jerry
            Posted November 27, 2012 at 1:28 pm | Permalink

            @Lifelogic: Perhaps as a Tory he doesn’t like the idea of publicly called referenda [1], Switzerland seems to work because it is far more democratic, in a way, far more socialist in their outlook even if they do invite the capitalist to invest in the country (in effect)!…

            [1] do you really think that the No.10 petition website would be existent is X number of signatories meant that the issue went to a referendum?

          • lifelogic
            Posted November 27, 2012 at 1:31 pm | Permalink

            I see the governments welfare to work program is worse than useless according to figures released. That is even before taking account of the jobs that were lost as a result of the taxes taken off companies and individuals pay for the silly schemes.
            Just leave the money with the companies who create the jobs in the first place and get rid of all the intermediate parasites, get some competition in banking and simplify employment laws.

            I see that this day 22 years ago John Major was elected leader of the Tory party. The country has had no sensible government since alas and Cameron has learned nothing from the 22 year ride it seems. I looks like the earliest the UK may get one is 2020 if then. Perhaps best to leave or not to return in my case.

          • Bazman
            Posted November 27, 2012 at 3:19 pm | Permalink

            He might quote high tax rates and absurd regulations? A big part of Swiss life.

          • Wonky Moral Compass
            Posted November 27, 2012 at 7:15 pm | Permalink

            He might and he’d be right about the absurd regulations part. Income tax, however, is no higher than in Britain even in the most tax-grabbing cantons. On balance, I’d take Switzerland, their absurd regulations and their 8% VAT rate any day.

          • lifelogic
            Posted November 27, 2012 at 7:56 pm | Permalink

            Bazman tax rates in Switzerland are rather lower than than under Cameron’s government and regulations generally more sensible. But I agree it could be even better.

            The UK could be a greater Switzerland with lower tax rates and fewer daft regulations too if Cameron had any vision.

          • uanime5
            Posted November 27, 2012 at 11:06 pm | Permalink


            Rest assured that the Work Programme hasn’t taken any money from companies as its £5 billion costs is going to be paid for by the savings made from getting millions of people off benefits and into work.

            Though if it fails expect the taxpayer to have to pay for the cost of this scheme.

          • lifelogic
            Posted November 28, 2012 at 2:31 pm | Permalink


            Failed it has and will, as all such government PR spin, job creation ( destruction) schemes nearly always do.

          • Bazman
            Posted November 28, 2012 at 5:16 pm | Permalink

            Switzerland is an example of how to run a country, but at the same time in Britain you want to pay no tax, have no employment regulations, or any other regulations and no social security. Switzerland like Germany is a quagmire of social mores and state regulation over private life and business with most of the populations spying on each other and reporting rubbish being put in the wrong bin cars dripping oil and hate for having more money than your social class allows. Like here Huh? Germany is a largely middle class society with foreigners doing the dirty work and desk jockeys getting high wages and benefits.
            What the fanastists are looking for is a German run cayman islands with middle class waiters and cleaners. Many thought that by the relaxation of the licensing laws we would have a European cafe’ culture. Look how that one turned out. Britain is not Switzerland or like any other country. You put forward many fantasies that would not work or you are willing to except there would be adverse consequences. Cuts that have to be rectified by more expensive methods after they have been carried out. Maybe this is the plan. Cause problems that private companies have to put right at the taxpayers expense. Pensioners private day car cut so they can be looked after by private care companies in homes. Why not just get rid of all housing benefit and let the market take care of it lets do it tomorrow. No government money for anyone on the street no B&B. Nothing. You know the answer.

  2. Duyfken
    Posted November 27, 2012 at 7:15 am | Permalink

    For the 7 months until Mr Carney takes up his post, I would hope that his predecessor will consult and defer to him on major policy matters, and better that Carney is immediately coopted to the MPC.

    • zorro
      Posted November 27, 2012 at 9:16 am | Permalink

      Hmmmm…….could be a tricky time, and not a particularly good time bearing in mind the global financial situation. Let’s hope that the bond market doesn’t pop some time soon……


      • Jerry
        Posted November 27, 2012 at 1:31 pm | Permalink

        @Zorro: The BoE is not rudderless, even if some do not like the current regime… But that said, I suspect the Canadians are having the same thoughts though, if the USA really does step off the “Fiscal Cliff” come in just over a months time then it won’;t just be the BoE and the UK panicking.

  3. alan jutson
    Posted November 27, 2012 at 7:21 am | Permalink

    At last we appear to have made a sensible decision, by not promoting failure from within.

    Let us hope that Dr Carney can bring some commonsense to the table, and that people will listen.

    • lifelogic
      Posted November 27, 2012 at 11:20 am | Permalink

      Indeed are there any Canadians around to replace the BBC trustees?

    • Single Acts
      Posted November 27, 2012 at 12:08 pm | Permalink

      Seems to me the real question is will Dr Carney continue with the QE? Given government spending, revenue and the popularity of its bond auctions, I can’t see he has much choice but to do so.

      This is a very tough job to take for anyone given that the banks colours are more or less nailed to the proverbial mast.

  4. Kevin R. Lohse
    Posted November 27, 2012 at 7:28 am | Permalink

    One of the factors which turned Canada round was a Government unafraid to exploit the country’s vast sources of hydro-carbons, thereby contributing in no small measure to a favourable balance of trade. Let us hope that Dr Carney can convince our politicians that the exploitation of our own not inconsiderable hydro-carbon resources will be more valuable to our nation that forcing the poorest to suffer so that the richest can thrive on handouts in pursuance of the chimera of so-called sustainable power.

    • Nicol Sinclair
      Posted November 27, 2012 at 1:40 pm | Permalink

      Kevin R Lohse: “Let us hope that Dr Carney can convince our politicians that the exploitation of our own not inconsiderable hydro-carbon resources will be more valuable to our nation…”

      Given the current circumstances, I doubt that very much… Cameroon is yet another tree-hugger with a vested interest.

    • BigJohn
      Posted November 27, 2012 at 4:55 pm | Permalink

      Another good factor is they treat these eco groups as terrorists.

      • lifelogic
        Posted November 29, 2012 at 12:04 am | Permalink

        Some certainly are criminal and need dealing with by the police, but many in government seem to approve of their actions.

    • uanime5
      Posted November 27, 2012 at 11:18 pm | Permalink

      The main factor that helped Canada was encouraging Canadians to borrow large amounts of money to buy houses. Something that isn’t sustainable.

      Canada didn’t turn itself around because of its oil exports but because it had exports people wanted to buy. Replace oil with a similar value of precious or rare metals, and the result is the same.

      • Edward
        Posted November 28, 2012 at 5:03 pm | Permalink

        Property prices in Canada are still much lower than the UK and like America there isn’t a UK mindset that your home should always go up in value.
        Canada has also had a boost from the pro-active encouragement of immigration from Hong Kong.
        Many skilled people from Hong Kong settled in Canada when China was taking over (especially in Vancouver area) and they have been a factor in Canada’s success.
        Strangely we didn’t really encourage wealthy people from Hong Kong to come here like Canada did.

  5. Jerry
    Posted November 27, 2012 at 7:56 am | Permalink

    To the interested lay person this seemed to be a good choice even without yours and others words of further support, Canada has certainly weathered the financial storm better than either the UK or the US, But the real surprise will be felt in the EU surely, here is a man who knows how to maintain a strong sovereign economy whilst bordering a much larger single currency, coupled to the fact that this appointment is likely to (either on purpose or indirectly via comparison) align the UK with the CAD and USD even more than the Euro…

    For all Mr Osborne’s ‘errors’ this just might be his master stroke, on many different levels.

    • Jerry
      Posted November 27, 2012 at 8:16 am | Permalink

      Oh dear, I’ve just read the Telegraph’s website… They seem to have dragged the political beliefs of Mr Carney’s British born wife into the mix – are they really suggesting that someone of Mr Carney professional intellect and standing would allow his domestic affairs to influence his work. Surely this amounts to the Telegraph playing the man and not the ball? Roll on Thursday and the subject of yesterdays blog, looks like even some of the broadsheets need to tone-down their rhetoric too. 🙁

      • Dave Bush
        Posted November 27, 2012 at 11:54 am | Permalink

        Well they do it enough with Mr Bercow – so what’s different?

        • lifelogic
          Posted November 27, 2012 at 1:44 pm | Permalink

          Well the dreadful Mr Bercow clearly deserve it all after his stance on the expenses issue. I know nothing of Carney’s British born wife, but anyway lots of people suffer from difficult arty, lefty, illogical or innumerate wives but still cope, often it makes them work longer hours so not all bad in a potential employee.

          Not myself, I am glad to say.

          • zorro
            Posted November 27, 2012 at 8:39 pm | Permalink

            What?…..Work longer hours or have an arty, lefty, innumerate wife. My wife is just innumerate…..


        • Jerry
          Posted November 28, 2012 at 9:16 am | Permalink

          @Dave Bush: You make my point nicely thanks, you either of these ladies (and their private lives) be any concern of the media if they were not the spouses of people whose professional lives -quite correctly- and thus far game for the media? Play the ball, not the man…

      • lifelogic
        Posted November 27, 2012 at 4:21 pm | Permalink

        Oh dear it gets worst she has, it seems, a first in PPE and worst still it is reported that she actually enjoyed the silly childish book “The Spirit Level”. He has all my sympathy.

        • zorro
          Posted November 27, 2012 at 8:40 pm | Permalink

          Good, he’ll be working until midnight then…..


    • Nicol Sinclair
      Posted November 27, 2012 at 1:41 pm | Permalink

      Jerry: “For all Mr Osborne’s ‘errors’ this just might be his master stroke, on many different levels.”

      Hear, hear…

  6. Steve Cox
    Posted November 27, 2012 at 8:08 am | Permalink

    I certainly think that Mr. Carney is a better choice than either Adair Turner or Paul Tucker would have been, but in the most important aspect of the job – monetary policy – his views seem to be somewhat mysterious. Does he favour QE, and does he believe that it has worked well in the UK, or has it actively contributed to the lack of economic recovery by pushing up inflation and so reducing real spending power, and by massively increasing the pension liabilities of companies with final salary pension schemes due to ultra-low gilt yields? Does he have any plans for further unconventional monetary stimulus, and what are his views on how far these should be employed, if indeed at all? And how much of an inflation hawk or dove is he?

    I suspect that Mr. Carney will be a good choice for cleaning up the musty, cobwebbed workings of the Bank of England, and he should also be well-suited to the new regulatory powers that the Bank will have. I am just a little concerned that so far no article I have read this morning has quoted his stated views on any of the above monetary matters, while surely over the years he must have made many speeches and statements outlining his own thought and opinions. One commentator mentioned that he has had a comfortable working relationship with the centre-right government in Ottawa. I certainly hope that doesn’t mean Mr. Osborne will be expecting him t continue printing money ad infinitum to fund his burgeoning deficit.

    • Acorn
      Posted November 27, 2012 at 6:55 pm | Permalink

      Don’t you believe it Steve. Mr Carney has taken the job, when he said he wouldn’t take the job, because he knows he is leaving Canada, with the highest Household debt to disposable income ratio, it has ever had. Even worse than the UK at around 160%. His low interest strategy is backfiring in Canada, just as King’s did in the UK. Carney applies the Goldman Sacks Elite / Bilderburg (words left out) algorithm, he has been programmed to do so. Osbo’ has been fooled again or, was he just following orders.

      Andy Haldane who runs financial stability at the BoE should have been the guy to take over as Governor. He is the only one who had fresh ideas on how to corral the banksters and break them up if they didn’t come to heal. He had the backing of Andrew Tyrie, the chairman of the Treasury Select Committee and he was sweet on the ICB Vickers Report. The 1% Elite made sure Andy didn’t get the job.

      • Acorn
        Posted November 27, 2012 at 7:19 pm | Permalink

        JR, any chance my last post will get moderated soon. It was one of my best, but did contain a video which, no doubt, you have not had time to watch. Get Nadine to moderate it for you, she seems to do the MP thing in much less time. Acorn . It pains me to say this but, you are starting to look like part of the problem, not part of the solution. Yes, I know the troops are starting to get a little fidgety, 30 months to the Westminster election. Unfortunately, Rotherham Council has just boosted the UKIP vote on my patch considerably. I am even wavering myself!

      • Steve Cox
        Posted November 28, 2012 at 5:27 am | Permalink

        Maybe that explains why Ed Balls and most of the Labour Party welcomed Mr. Carney’s appointment, which I thought was rather odd. By all rights they should have been bemoaning their beloved Red Adair not getting the job. So Osborne is happy as he has a new best friend in Threadneedle Street who will continue printing money to fund his overspending, while Labour are happy as they see another central banker who will be happy to preside over a period of even more overspending and overborrowing. I hope I’ve got that all wrong! ;-(

  7. Gary
    Posted November 27, 2012 at 8:43 am | Permalink

    Canada in a sense were lucky. They had their banking crisis in the nineties when the rest of the world was growing strongly to help pull canada through. Canada , to their credit ,did not print they restructured and emerged in good shape. Carney had nothing to do with it.

    Now the most of the world is buried in debt, and govts are all printing. Only the eurozone , to some extent, at the urging of Germany ,is restructuring.

    Politically, I don’t think Carney will be allowed to do the right thing , it will be more of the same.

    • Nicol Sinclair
      Posted November 27, 2012 at 1:43 pm | Permalink

      Gary: “Politically, I don’t think Carney will be allowed to do the right thing , it will be more of the same.”

      How right I think that you might be but I sincerely hope not.

    • lifelogic
      Posted November 27, 2012 at 1:45 pm | Permalink

      “Politically, I don’t think Carney will be allowed to do the right thing , it will be more of the same.”

      I suspect you are right, alas, but let us hope he is.

  8. zorro
    Posted November 27, 2012 at 9:08 am | Permalink

    Interesting…….another former Goldman Sachs employee (and recent Bilderburg attendee) in a very powerful position within a leading world economy…….former head of sovereign risk within GS, and involved with ‘assisting’ the Russians during their financial crisis in 1998. (words left out)
    It seems that his actions in providing additional liquidity to the Canadian financial system allowed them to weather the storms better than we did. However, the Canadians were not as exposed as we were, or as dependent on the financial sector. They also did not have quite the same kamikaze risk appetite in which our behemoths were engaged.

    I think that the time factor is also interesting. I think that you would want his feet under the table quite quickly. An outgoing head with a deputy who was passed over in charge for the next year is not an ideal solution, however, I suppose that they have to extricate him contractually from the Canadian job.

    With regards to John’s points…….

    1. I wonder how focused he will be in ensuring that the banks actually lend to firms in the UK and the productive economy….or will he prefer the global speculation mood to endure. Maybe he might rely on his experience as managing director of investment banking at GS.

    2. I should think that there will be more QE (I would be amazed if they did not)….I’m sure that he might have an inkling that UK banks are very highly leveraged and their blood transfusion is the QE programme which gives them free money to lend either at extortionate rates, park it with the B of E, or do something else with it. The mood has already been set. The banks are not lending and are merely shoring up their own position with taxpayer aid and stuff the rest of us. How much of the QE is actually helping the productive side of the UK economy?….I still stand by my prediction of northwards of £500 bn by the next election.

    3. Low rates will continue for a long time yet, because the government would be screwed on repaying its debt if interest rates rise. The interest rates are for the the benefit of the banks and government not the UK businessman or Joe Public who is being charged ridiculous rates if they can be bothered lending rather than calling in loans.

    4. No John, they won’t do that to get a grip on inflation. We are talking about liberal Conservative big government Cast Elastic here….

    5. I doubt that they will do that either…..I doubt that much of the present ‘direction of travel’ will change…..The only bank doing any lending is the Bank of the Taxpayer to bail out the zombie banks.


    • outsider
      Posted November 27, 2012 at 12:03 pm | Permalink

      Yes Zorro, it is another clean sweep for Goldman Sachs, with Mario Draghi, another former GS managing director, at the ECB. Mr Carney had a senior role there when Goldman made its notorious debt-hiding deal with Greece, though I am sure that Mr Carney was not involved and knew nothing about it, just as Mr Draghi knew nothing about swap deals in Italy that had a similar accounting purpose.
      I have always disliked conspiracy theories, especially those awful mediaeval ones that still surface in the modern world. I don’t know if Mr Osborne and Dr Carney attended the same weekend meetings of the Bilderburg Group and would not regard it as particularly sinister if they did. But I do worry that Bilderburg and the “Goldman Sachs Project” internationally, and the Liberal/Left Common Purpose at home are powerful networks of like-minded folk that transcend democracy.
      I just hope that Dr Carney’s bank-supervising and monetary regime, though doubtless benign to well-run investment banks, will also be benign to what is left of British industry and to the average British worker and saver.

      • sm
        Posted November 27, 2012 at 2:31 pm | Permalink

        Yes – i noted the Goldman Sachs connection.

        As for the banks just why not let them downsize and compete, remove their subsidies and increase capital ratios to 100% and forbid private creation of money.

        The government can then spend money into existence on infrastructure, removal of NI on labour or similar subject to maintaining stable purchasing power, which the BOE should help to ensure.

        Debt reduction by giving fiat money to the people to pay down debt is one way to shrink the banks and allow disposable income to stimulate the economy? ( Another outsider: Prof Keen ideas probably do need to be considered)

    • Nicol Sinclair
      Posted November 27, 2012 at 1:46 pm | Permalink

      Zorro: “I wonder how focused he will be in ensuring that the banks actually lend to firms in the UK and the productive economy….”

      Me, too. And I hope that he is able to force them back to lending.

  9. Bob
    Posted November 27, 2012 at 9:20 am | Permalink

    “3. How long should interest rates penalise savers, and damage pension fund liability calculations?”

    Precisely, this is another raid on pensions.
    Is it any wonder that pension saving is declining?

    • Single Acts
      Posted November 27, 2012 at 12:10 pm | Permalink

      For a few reasons, why would anyone save money in a bank at present?

      • Jon
        Posted November 27, 2012 at 9:18 pm | Permalink

        Perhaps because unless they have a stack load of cash they can’t afford the advice which used to be readily available to everyone.

        Thanks to G Brown and A Turner, chances are they are also paying 20% on credit loans whilst their savings are getting many times less than the rise is cost of living.

  10. rick hamilton
    Posted November 27, 2012 at 9:43 am | Permalink

    A man with international experience who has actually worked in a real commercial business and speaks another language. About time too.
    Now let’s have government ministers appointed from the ranks of those who have successfully held down real jobs, instead of inexperienced political insiders who have only read about it in books.

    • Nicol Sinclair
      Posted November 27, 2012 at 1:50 pm | Permalink

      Rick Hamilton: “A man with international experience who has actually worked in a real commercial business and speaks another language. About time too.
      Now let’s have government ministers appointed from the ranks of those who have successfully held down real jobs, instead of inexperienced political insiders who have only read about it in books.”

      OMG! How right you are. I am really fed up with career politicians who simply ‘follow the path’. If only I were 20 years younger (I’m 70!) I would seriously think of running for the ‘Trough’. Meanwhile, I consider myself to be too old 🙁

  11. Wilko
    Posted November 27, 2012 at 9:43 am | Permalink

    Demand causes growth, and inflation.

    Demand is the consequence of what millions of individuals decide is worth buying.

    Even the finest operator in existence would have only loose control over what individuals would choose in future multi-variate circumstances.

  12. Brian Tomkinson
    Posted November 27, 2012 at 9:58 am | Permalink

    A welcome surprise. The appointment of one of the other publicised candidates would have been depressing. We shall have to hope, wait and see if the BoE under this new leadership can be turned around from its many failings.

  13. waramess
    Posted November 27, 2012 at 10:36 am | Permalink

    It’s all now a bit of a circular conundrum.

    How can he increase interest rates and restore the banks to good health at the same time?The dam of low interest rates will be breached and the flood of reposessions and corporate liquidations will simply drown the banks, and what is to be done about the vast paper losses the banks will show on their low yielding bond purchases

    How can he restore the health of the banks so that they commence lending normally again without having a plan to reverse the QE that Merv initiated? Certainly fractional reserve banking will enhance the damage done to the economy by the vast increase in money supply and hyperinflation must be on the cards if he is unable to reverse QE by selling gilts in competition with the DMO.

    We now have a tiger by the tail having deferred all the natural processes of a recession and now all are waiting to break through at the same time.

    Perhaps it might have been better to decline the “opportunity” much as Cameron should have done after the last election

    • Glenn Vaughan
      Posted November 27, 2012 at 11:36 am | Permalink

      I suspect Dr Carney will encounter suspicion, bitterness and resentment from hardline traditionalists from within the BoE, who believe that insiders know best.

      Hopefully he will instigate a clear-out of staff if he meets such obstacles.

  14. Rob
    Posted November 27, 2012 at 11:00 am | Permalink

    Its nice to see its not another jobs-for-the-boys appointment promoting failures, but this chap shouldn’t necessarily be seen as the saviour – just another link in the gradual takeover of European financial institutions by Goldman. No surprise he’s a Bilderberger either.
    Watch out for Goldman shorting the pound around June next year.

  15. Neil Craig
    Posted November 27, 2012 at 11:44 am | Permalink

    Because he is a major financial figure in his own right he will be able to stand up to the politicians. He will not have to merely pretend the MPC is “independently” setting interest rates. That, on its own, makes his appointment worthwhuile.

    It is remarkable to see everybody from the Labour party to the Times saying what a fine appointment it is despite not having called for it before. By comparison GJ Wyatt, in comments on John’s site, did include him in 2nd place

  16. graham
    Posted November 27, 2012 at 11:45 am | Permalink

    Be interesting to see how he gets on in the UK rather than the much easier Canada.
    The big difference is that Canada is a large country with a small population, (roughly half of ours), whilst we are the exact opposite. Our population is unsustainable, yet the government keeps on importing a quarter of a million more mouths to feed every year – another of Dave’s cardboard promises that he has not even attempted to honour.

    My betting is, that after 5 years, he will be in the same position as Merv – a failure. Presumably, he believes in much the same as Osbourne, or he would not have appointed him. Continuing the same and expecting different results is insanity. G.S. and Bilderburg score again. What a surprise.

  17. Dave Bush
    Posted November 27, 2012 at 11:57 am | Permalink

    Mr Carney is a big gamble – clearly he is Osborne’s man, which may not be a good thing. Also, he has relatively little experience of running a country with a large financial sector, who mainly call their own tunes. Also, Canada weathered the storm better as they have vast natural resources.

    Anyway, I wish him the best of luck – he can’t be any worse than Mystic Merv.

    • Duyfken
      Posted November 27, 2012 at 12:49 pm | Permalink

      “… he can’t be any worse than Mystic Merv.” I pray that is the case.

      I note that he is a Bilderburger and that this term is apparently equivalent to Vichy, Stasi, Common Purpose and who knows what. Is it really the case that anybody attending the Bilderburg meetings should be marked for life as unfit for public office?

    • Conrad Jones (Cheam)
      Posted November 27, 2012 at 1:08 pm | Permalink

      Mervyn King didn’t work for Goldman Sachs – if you thought he was bad; Mark Carney will dazzle us with his expertise at bafflement before leading our savings into the slaughterhouse of QE on steroids or knee jerk reactionary Interest Rate Hikes, when the Bond Market begins to Collapse – devastating millions of home owners. then Dr Carney will “Save” us all with his magic act that will invite us into the EURO – where we will be safe and warm in lollipop Land – just the Greek people.

      Out of 60 Million People in the UK – they couldn’t find ANYBODY to become Governor of our own Central Bank?

  18. A Different Simon
    Posted November 27, 2012 at 12:06 pm | Permalink

    So Goldman Sachs get to appoint the Governor of the B.O.E. along with other members of the MPC .

    An impressive illustration of their power and the facade of democracy isn’t it ; prime minister of Italy , prime minister of Greece and head of ECB too .

    Does anyone seriously think there is any chance of the UK leaving the EU ?

    • Nicol Sinclair
      Posted November 27, 2012 at 2:53 pm | Permalink

      Let’s see, eh?

  19. Conrad Jones (Cheam)
    Posted November 27, 2012 at 1:01 pm | Permalink

    What’s Mr Carney’s agenda?

    (words left out)
    Europe has currently got an outbreak of Ex-Goldman Sachs Employees – they’ve gone viral.

    What idiot in the British Government thought it was a good idea to put an ex-Goldman Sachs employee in the Top Central Bank Job? Perhaps whoever it was – sees europe as an overwhelming Financial Success.

    What’s wrong with Paul Tucker ? (apart from the LIBOR allegations of course).
    (More anti Goldman material deleted)

  20. Conrad Jones (Cheam)
    Posted November 27, 2012 at 1:33 pm | Permalink

    Why not just appoint Lloyd Blankfein as Prime Minister? Why do we even need an English Prime Minister !!!!?

    Goldman Sachs is a (word left out) Investment Bank that would be out of business if it weren’t for the Federal Hand outs – paid for with Austerity measures. They helped cause the Financial Crisis in the U.S., … and you are congratulating him?

    (launches attack on Goldman Sachs-ed)

    Please, Mr Redwood; if you have any compassion in you at all – fight against the appointment of Dr Mark Carney – I haven’t got a problem with Canadians (except maybe Conrad Black) , but Mark Carney worked for thirteen years as Goldman Sachs; (personal attack deleted) – please, please don’t let him become Governnor – – I’ll shut up about Monetary Reform (for a short while), but don’t let Goldman Sachs take over our Economy. Please.

    Or do you think Mr Draghi has done a good job in Europe ?

  21. Conrad Jones (Cheam)
    Posted November 27, 2012 at 1:51 pm | Permalink

    The BBC said that George Osborne;
    “… says the appointment is designed to send a signal to the world that the UK is a global place, open for business where nationality means less than talent. ”

    That’s right, George Osborne doesn’t think the UK has got any talent. He thinks Goldman Sachs employees are “Talented”.

  22. Vanessa
    Posted November 27, 2012 at 2:00 pm | Permalink

    It certainly was a surprise appointment, especially as the Governor was supposed to be chosen in an open and transparent way. OOOPs, we’ll just parachute in a Canadian who did not want the job and only put in an application form at the INTERVIEW. How open and democratic was that ??

    • Jerry
      Posted November 27, 2012 at 6:31 pm | Permalink

      @Vanessa: Those who needed to know, knew, those who just wanted to be nosy (or worse, interfere) didn’t…. Openness is what it needs to be, nothing more and nothing less. Also anyone who thought they were qualified for the job could have applied.

    • zorro
      Posted November 27, 2012 at 8:48 pm | Permalink

      I suspect that he was given an offer that he couldn’t refuse……


  23. Lindsay McDougall
    Posted November 27, 2012 at 3:03 pm | Permalink

    1. Sell the shares, leave the banks alone, don’t bail them out.
    2. None; when a chance arises, unwind existing QE.
    3. No longer.
    4. By raiding base rate.
    5. By raising base rate, cutting public current expenditure, and reducing the top tax rate to 40%.

    Why can’t all these be policy now? Why wait?

    • Jerry
      Posted November 27, 2012 at 6:41 pm | Permalink

      Why can’t all these be policy now? Why wait?

      Because partisan political dogma rarely ever works for anyone other than for the small group it was always intended to benefit! 🙁

      • Lindsay McDougall
        Posted November 27, 2012 at 9:30 pm | Permalink

        There’s nothing small about the group my policies would benefit. Reducing the top rate of income tax back to 40% would give an increased yield to the treasury. The ultra low base rate and QE is a quack remedy that delivers inflation not real growth – this is true both in theory and (demonstrably) in practice.

      • Single Acts
        Posted November 28, 2012 at 5:28 am | Permalink

        Indeed. The crux of it.

  24. Canadapost
    Posted November 27, 2012 at 3:05 pm | Permalink

    This appointment will be interesting. Canada’s banking stability seems to rest upon banks with admirably modest aspirations. There are no wannabe world-beaters on (Toronto) Bay Street apparently. By contrast, most British banks have nurtured grandiose (global) ambitions which got them into trouble once international money markets froze. Carney is well aware of this from his time in London, but still it will be quite different from the modest world of Canadian banking.

    • zorro
      Posted November 27, 2012 at 8:51 pm | Permalink

      This modesty stopped Canadian banks getting embroiled in the worst excesses of global speculation….no mean feat…..I wonder though if this might be akin (in football managerial terms) to a good nationwide league manager stepping into the premier league where the pace is different, and the pressures are more constant…


  25. John Doran
    Posted November 27, 2012 at 3:16 pm | Permalink

    Anyone care to hazard a guess how long our kids & grandkids are going to be paying for this mess?

  26. Bazman
    Posted November 27, 2012 at 3:21 pm | Permalink

    Is the doubling of his salary to incentive him or help the move from Canada? Not one comment questioning this tells a lot about the contributors to this site.

    • zorro
      Posted November 27, 2012 at 8:55 pm | Permalink

      Come on Bazman…..I think it’s pretty obvious that the hike in salary shows the mindset of Osborne chasing the man and him being invited for interview and subnitting his application at the same time….. Try not to think the first of us all the time. Our blood is red too you know….


      • zorro
        Posted November 27, 2012 at 8:56 pm | Permalink

        Try not to think the worst of us….

    • Edward
      Posted November 28, 2012 at 5:14 pm | Permalink

      I would say his salary is too high and seems to lack enogh of a performance related pay element.
      So there you are Baz, happy now?

      You say “what does (the lack of replies) say about this site:- well I think it says that most people on this site prefer to comment on Mr Redwood’s excellent articles rather than your endless questions!

      • Bazman
        Posted November 29, 2012 at 8:59 am | Permalink

        Good work Edward right decision. The fact is that you have few questions and just accept right wing views as being without consequences and further cost. Costs that you do not say whether they should be picked up and what would happen if they where not. You are little more than a sympathiser and (etc).

        • Edward
          Posted November 29, 2012 at 1:16 pm | Permalink

          You have your views and I have mine, broadly I agree with Mr Redwood’s political opinions and that is why I enjoy this excellent site.
          You seem to think you are always right and that anyone who disagrees with you is wrong and therefore the enemy.
          I believe I am a little more questioning of what is the correct solution to our current problems than you and a little more open minded.
          But who knows, time will tell what the better solutions are, as will our election results.
          At the risk of sounding old fashioned Baz, I think that it is best, until that point is reached, to remain decent, polite and calm to one another.

          • Bazman
            Posted December 1, 2012 at 6:55 pm | Permalink

            The constant attacks on the working and non working poor blaming them for the current financial crisis make many of the posters on this site the enemy. Their blind and often dogmatic views that when challenged go silent is telling, protected by the MCSSS they think they can out forward their sparrows and horses theories and everyone else is a socialist when often they are the ones in favour of communism for the rich. Wages for the population as a whole have fell for nearly a decade with prices of services and goods rising dramatically. This being the fault of the unions asking for more pay? The most wealth have gained the most by far getting massive pay rises for failure in may cases whilst trying to drive the pay and condition of the majority down further. Ironically their supporters ii the middle classes have lost the most, but still blindly believe that if they work hard and keep their heads down will be rewarded. With crumbs it seems. Many thinking they are middle class because they work in an office earning minimum wage and giveing loyalty.Loyalty? Relly got you then. The unions unreasonably asking for fair wages and conditions. At its most extreme shown by the contempt for the the hundreds of Indians who die in factory fires due to dangerous conditions justified by saying they should be glad for the work and any improvement in conditions like fire exits will cost jobs as the western supermarkets will use cheaper competitors. A similar argument is used here, but does not apply to the managers massive wages bleating they are being exploited by the tax system, but using the system to subsidise their companies profits with tax credits believing they are part of workers wages pretending they are like small companies and coming out with nonsense like the employees would only spend it on drink and holidays or They do not manage their money properly. Ram it. I mean Toodle pip Edward.

  27. oldtimer
    Posted November 27, 2012 at 3:34 pm | Permalink

    I wish him luck. He, and the rest of us, will need it to get through his five year term and still keep the shirts on our backs.

  28. David Langley
    Posted November 27, 2012 at 3:38 pm | Permalink

    I gather from radio 4 that Mr Tyrie will be interviewing Mr Carney in front of the Treasury Committee. It is almost like getting the job and then going through the selection process. I hope that Mr carney is faced with your question agenda, please do give MR Tyrie your thoughts.
    Is this gentleman a member of the Bilderberg Group by any chance?

    Reply According to contributors here he attended a B meeting. I will pass on my questions to Mr T.

    • zorro
      Posted November 27, 2012 at 9:00 pm | Permalink

      John, he attended the last meeting in Chantilly, Virginia on 31/05/12 – 03/06/12……


  29. Richard1
    Posted November 27, 2012 at 4:09 pm | Permalink

    He should read this blog during the intervening months & then he will arrive very well prepared. It is interesting that he reportedly doesnt agree with the Vickers commission recommendation of a ring-fence of investment banking activities, knowing this to be a nonsense in practice. I wonder whether he will arrive in time to spoke Vince Cable’s wheels on this issue?

  30. Mike
    Posted November 27, 2012 at 5:10 pm | Permalink

    Well well, 8 Tory MPs are looking to defect to UKIP the telegraph claims….

    I hope you’re one of them John, though I doubt it.

    One the day that an Italian prime minister, one indeed that was installed in, lets not mince our words, and EU sponsored coup decided to lecture the British on the democratic principle and the need for a referendum the funniest story in the newspaper related to a Tory MP.

    Although the story itself was about A-lists the quote

    “It was important symbolically…but people reacted badly to coercion,” A-list MP Gavin Barwell tells me.

    Must go down as one of the most amusing ever uttered by a politician. People reacting badly to coercion? You don’t say.

    Shame you can’t coerce them into not voting UKIP.

    Reply: Apparently having lunch with Mr Wheeler is enough to qualify you as a potential defector! I have not had lunch with Mr Wheeler. There are no Tory MPs planning to defect to UKIP.

    • Mike
      Posted November 27, 2012 at 6:16 pm | Permalink

      I’m sure it was perfectly innocent then…

      Are Tory MPs in the habit of having lunch with the Labour party treasurer?

      One would wonder what Mr Wheeler and all of these MPs talked about…

    • Jerry
      Posted November 27, 2012 at 7:21 pm | Permalink

      @Reply: I have to ask why any of these MPs were naive enough to think that they could “just have lunch” with Mr Wheeler and not be linked in some why to a UKIP publicity stunt?…

  31. Barbara Stevens
    Posted November 27, 2012 at 6:34 pm | Permalink

    He seems a nice man and his reputation seems well documented. However, on today’s Daily Politics show there was a question of whether the Canadian economy is faltering and he’s jump ship before the flack flies. We will have to wait on that one. I agree that is is better not to have any of the old lot who have presided over the bad times, a fresh start is the best thing. Lets hope he lives up to his reputation, but are we expecting to much?

  32. Iain Gill
    Posted November 27, 2012 at 6:46 pm | Permalink

    I do love this blog.

    My main frustration is that most of the posts are written from the perspective of finance director of UK PLC. I think John is great and I would like to see more written from the perspective of HR director of UK PLC, or manufacturing director of UK PLC, or distribution director, or sales director, or IT director, or R & D director, and so on.

    Lots of Love

  33. Jon
    Posted November 27, 2012 at 7:21 pm | Permalink

    Great, its not going to be Adair Turner. Gut feeling is that I like this though no policy lead I would imagine till end of next year earliest.

  34. Caterpillar
    Posted November 27, 2012 at 7:24 pm | Permalink

    “On his agenda should be the following questions: ..”

    No, these should not be on his agenda, they should have already been tackled, they should be old news.

    “How does the UK get a grip on inflation?” Firstly by admitting it. I know I keep saying it but plot the actual CPI from 12/2003 to 12/2007 and fit => 2%, plot 1/2008 to present and fit => 3.25%. By reporting the annual rate the noise disguises the trend. With such transparency perhaps even the current major parties could not excuse themselves for holding the MPC policy to account on its major target – no need to wait for a change in leader.

  35. Jon
    Posted November 27, 2012 at 7:27 pm | Permalink

    By the way the lecture at the Centre for Policy Studies on YouTube was excellent. Whats more is that it was delivered in a language that made the points easy to understand.

  36. Conrad Jones (Cheam)
    Posted November 27, 2012 at 10:17 pm | Permalink

    List of other ex-Goldman Sachs employees involved in the EURO Project:

    1. Mario Draghi – Head of ECB
    2. Peter Sutherland – Attorney General of Ireland during the Crisis.
    3. Mario Monti – unelected Prime Minister of Italy
    4. Otmar Issing – Board Member of Bundesbank and ECB
    5. Lucas Papademos – Unelected Prime Minister of Greece (involved in Goldman Derivatives Deals prior to the Crisis while working in Greek Central Bank)
    6. Petros Christodoulou – Head of Greek Debt Management

    Next Year – 2013 …

    7. Mark Carney – Governor of the Bank of England (Goldamn Sachs CEO at time of Crisis)

    All encourage Bank Bailouts and Austerity Measures. (their policies-ed) in Europe has given Europeans Misery, …. and Civil unrest. there are almost daily riots in Greece, Italy and Spain. Does George Osborne want that for us too? I thought Gordon Brown was bad enough.

    Appointing Mark Carney (of Goldman Sachs) as Governor of the Bank of England could be George Osborne’s “Brown’s Bottom” moment. It starts off with praise from all the Press – then the drug of ignorance wears off after a year or two and after the damage is done, we all realise what a ludicrous mistake it was.

    Well this time I’m realising the mistake right at the start. Why appoint someone who does not even have a British Passport – where’s his work permit? If/when he wrecks the UK Economy, he can stroll back to Toronto or Ottawa in Canada.

    This is a sign that something very bad is going to happen – the only way to carry out whatever plan they have in mind, is to appoint someone who can slide away to another Country. It would be much harder for Paul Tucker or Charles Bean to knowingly wreck their own Nation’s Economy.

    (Allegation about Mr Carney deleted)
    In Canada, a UK Citizen is not allowed to take a Job that a Local Canadian can do. The Job has to be offered to local residents first and only if no one wants the Job, then a Foreigner can be employed provided they have a work permit. So no UK resident wants the Job of Governor?

    Is Mark Carney’s goal to remove notes and coins from circulation entirely, so that all Money is created by Private Banks? What’s his hidden task list?

    Reply: People who have well paid careers at a variety of institutions do not usually carry forward the views and aims of a past employment many years later when they are working somewhere else.

  37. Andrew Smith
    Posted November 27, 2012 at 10:32 pm | Permalink

    I also wish Dr Carney great success.

    But what should we do about failed or failing Governors and senior BoE staff in future?

    It seems to me the current Governor has been a disaster but he will be allowed to see out his full term on full salary without being dragged through a bush backwards and probably Dave will give him a peerage. If the PM does not recommend him for such an honour probably Labour will as thanks for allowing them to run the sweet shop the way they wanted and as a bribe to keep quiet.

    Seriously, the interview by MPs should be searching and periodic interviews should be tough enough that they can lead to dismissal in future. If failure in certain roles is considered to be sensitive then do the interviews partly in private but make sure the incumbent leaves the room with a drained face and shaking.

  38. Derek Emery
    Posted November 28, 2012 at 8:30 am | Permalink

    All of the old industrial economies are suffering from low growth and ageing demographics. We are worse placed because around half our trade is with the eternally low growth EU which analysts reckon will be in some form of crisis for a decade by which time EU ageing demographics will savage growth. OECD prediction for average UK growth up to 2060 is 1.6% compared with the OECD average of 1.7%.

    No UK party is going to make voluntary serious cuts in spending (likewise for most of the OECD countries) so our debt trajectory like theirs will be firmly upwards as the ever-rising social costs from ageing demographics bite harder and harder. The debt trajectory is unsustainable. Since politicians cannot make the cuts without losing votes the markets will force them through rising interest rates as the UK debt/GDP ratio continues to climb until a point is reached where more market loans are unaffordable.

    Even if Labour or a Labour-Lib Dem coaliton are in power by when this happens they will have no choice but to cut as the the only way to get IMF loans to keep the party rolling will be through making sizable cuts to bring expenditure within income.

    • waramess
      Posted November 29, 2012 at 10:51 am | Permalink

      .and all as a result of successive governments moving resources from the performing to the non and poor performing parts of the economy.

      Whether it be in the form of taxes to support a burgeoning state sector, saving the banks, subsidising the railways or the running of the NHS as a public enterprise, all have the same debilitating effect, and then we complain there is no growth.

  • About John Redwood

    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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