I was telephoned and Thursday and invited onto the Today programme for Saturday to discuss the successes and failures of the Govvernor of the Bank of England . I readily accepted and said I would adjust my Saturday morning to get to a studio.
On Friday evening they left a message to say I would no longer be requried.
So I listened this morning, to hear two others agreeing in a technical discussion about quantitative easing. Both said they thought printing money to buy government debt was a good idea. Both said they thought the Governor had made a mess of it, by his recent comments. The interviewer got frustrated that the interview was so technical, punctuated by “quantitative easing” “driving down long term interest rates” and “corporate and government bonds” instead of talking about the rates we have to pay to borrow from the banks, the absence of interest on our savings, printing money and the persistent inflation in the prices of food and other imports.
I guess the reason I was not invited on was they did not like my viewpoint. On the Thursday they wanted a long conversation to find out what I thought about the current position. So I will share it with you here, as it was kept off the airwaves.(This is a reconstruction rather than a transcript)
BBC Question: What do you think of the performance of this Governor and the Bank?
Answer: The Bank has failed in its two given tasks, to prevent the collapse of banks and to keep CPI price rises down to 2%. Never before has the Bank presided over the near collapse of five important banks, all rescued by large injections of public money. Inflation is still 60% above the target given, despite a severe downturn in activity and substantial unused plant, equipment and labour.
Not all of this should be placed on the shoulders of the Governor. As he has pointed out, the credit boom which led to too many price increases was partly created by the government’s decision to switch inflation targets to keep interest rates down prior to the 2005 election.
The Bank of England was stripped of its powers to supervise the banks day to day in 1997, which made it much more difficult for them to understand the degree of banking risk built up in the credit bubble and to take action to stop it.
BBC Question: Was the Governor right to intervene on fiscal policy as he did this week?
Answer. He was right about the substance of the issue. More spending and borrowing now would be wrong for the UK economy and could damage the government’s ability to raise money and lead to further weakening of the pound. It is a pity he has to do it in public, but it is a sign of how the system is not working well that he feels the need to. There are clearly tensions at the top, when these things should be sorted out in private.
It is clearly the BBC’s new tactic to waste my time telling them my thoughts only to discard them. Last week the BBC wanted me to make a film of my views on how to sort the banks out. I cleared my diary for the Friday afternoon, organised a local business who would help us set out the case in tele language, and laid on a windows and conservatory showroom as the film set with script based around breaking glass and difficult times in the building industry. They came, they filmed, they said it was great – and then they failed to show it!