Mr Blanchflower resigned from the Monetary Policy Committee. He now thinks it should be abolished because it did not agree with him whilst he was on it, and may soon disagree with him again.
Readers of this blog will know that I too have been constantly critical of the various calls the MPC have made, in the run up to the Crunch, during the Crunch and in the aftermath of the Crunch. The MPC was told to keep inflation around 2%. They allowed it to soar well above target, they forced it to slump well below target,.and now they are letting it surge well above target. It is not a good record.
The MPC are given the task of regulating the economic clock so it always gives steady and reliable time. Instead they speed it up too much when it is already running fast, and slow it down too much when it is already in danger of stopping. Mr Blanchflower is someone who favours speeeding the clock up. He recommends lower interest rates and loser money. He is trying to fight unemployment and recession, and thinks you can do that by printing money – if only. Inflation well over the target rate does not seem to worry him.
The MPC remit is to control inflation. They have failed to do this. They need to think again about why they have got it so wrong, and try to do better in the future. Who are they kidding with their current 0.5% interest rate? Have they not noticed that everyone else has to use much higher rates than their recommended rate, and even the government now has to pay a lot more for most of its money.