Tuesday, Jun 17, 2008
Mervyn King's first draft
FT - Lex: Mervyn King's first draft
Much maligned on hpc, Mervyn's first draft to Darling...
Posted by james @ 09:32 AM (572 views) Add Comment
4 Comments
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1. str 2007 said...
Not being a premium subscriber I can only imagine how the letter continued.
However the opening pretty much sums it up you'd think.
2. icarus said...
Why a letter anyway? If they intended doing something about it they'd have a meeting. There something quaint and schoolboyish about writing a letter - like explaining yourself to the headmaster. Does Mervyn use a quill and ink and blotting paper? Did Darling complain about the number of smudges on the last letter? If CPI goes above 4% does Mervyn have to write the letter 50 times?
3. Fatjock said...
Perhaps this is more like the first draft:
"Deer Chansullor
I fink I has dun rong again. can ewe help me un let me raze raits pleeze?
Fancs
M
xx"
4. James said...
p'fft fatjock - don't buy the gov't's spin on this. Most of the problems really are not BoE driven. Here's the full Lex for non-premium, which rather points out why I think you're wrong...
Dear Chancellor,
Consumer prices rose above 3 per cent in May [Please check on day, MK], so, for the second time, I have to go through the humiliation of writing to you. The last time I had to do this was in April last year. Frankly, I’m getting a bit tired of taking the flak for problems that are not of the Bank of England’s making.
There are, though, ways you could be helping me out. If you really wanted inflation to be low and stable, you should have responded to my hints that we include some measure of house prices in the target index. If you had, we would have raised rates and prevented the property-led boom from running away as it did.
Perhaps you feel I am not helping you out either, by keeping interest rates on hold when the economy is heading towards a recession. But it is not the Bank’s primary responsibility to bail out the economy. It is yours. If the Treasury had not left the kitty bare, you would have some money for tax cuts.
Actually, Alistair, a big part of the problem is that your boss took too many powers away from us in 1997. The Bank’s not responsible for the credit crunch – whatever the public thinks – but if we had been overseeing banks, you can be sure we would not have let Northern Rock slip past us.
People in the know (just look at the futures market) realise interest rates are going higher. You won’t like it, but that is what’s coming. And getting a load of “City experts” to advise me won’t make a bit of difference.
Yours,
Mervyn King