Wednesday, Jan 20, 2010
Danny-boy's latest outburst
Moneymarketing: Blanchflower calls for the MPC to be axed
Former Monetary Policy Committee member David Blanchflower has called for the MPC to be disbanded as he believes it is “not fit for purpose”. Writing in the New Statesman, Blanchflower says the recession has been much deeper than it needed to be because the committee was “asleep at the wheel”......................
Posted by jack c @ 04:06 PM (1488 views) Add Comment
17 Comments
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1. inbreda said...
asleep at the wheel?
Surely he is referring to the time when he was a member?
Mind you - he still is a member fnar fnar
2. mark wadsworth said...
Agreed. I did a fun online poll on whether the MPC should increase rates, hold them, reduce them or disband itself. A majority was for "disband".
3. jack c said...
Hi Mark - if the MPC was scrapped what would replace it? or would we revert to the previous arrangements
4. another alan said...
It would be good to have a bit of discussion regarding this, rather than knee jerk name calling.
He is referring to the time when he was pretty much alone when voting for cuts, against the main mandate of the BoE. He was largely right then, and most visitors to this site knew/know this: the economy despite not being officially in recession was in a mess. He's largely right now: the economy is still in a mess, and the BoE mandate is not going to help things. It is too soon to remove the extraordinary monetary and fiscal stimulus that the economy is receiving. I also wonder whether his 5% inflation target is actually such a bad idea given the current strife. The economy is a basket case despite what soon to be published figures might suggest. Blanchflower knows this, and hence his recent comments.
In my position as a net saving renter, his suggestions are pretty bad for me on a personal level (if I want to buy a reasonably priced house - I will stay away from that market for some time yet), but think that they are pretty good ones for the economy as a whole.
Just an opinion, what do others think? (I love the debating threads.)
5. 51ck-6-51x said...
Disband the MPC?
No.
Disband the central bank & allow the free market to do the work.
6. quiet guy said...
@another alan
I suspect that part of the reason Blanchard gets some stick from this blog is due to his personality. His habit of making sweeping confident assertions that he (always) knows best is quite irritating. If we are unfortunate enough to suffer a gilts strike and are forced to raise interest rates will he admit he wrong to promote easy money policies? I doubt it. The fact is that nobody 'knows' for sure what will happen to the UK in the next few years, except for Blanchflower who has the confidence of the ignorant.
7. hpwatcher said...
The liberal thinking of people like Blanchflower led us into this mess; I am certainly not going to listen to anything he says.
8. another alan said...
Quiet guy, thanks for the response. I agree, caution is always necessary when discussing the economy and particularly its future path.
9. stillthinking said...
I have occasionally held a better view of this guy, but Branchflower calls for 5% inflation (UK monkeys too stupid to coco), abolition of the BoE (bad as they may be) with replacement of super trustworthy Gordon Brown, and presumably a nice role for himself.
Branchflower pushed for lower rates in the same way Greenspan did, just to keep blowing the debt bubble. Suppose he had succeeded. Exactly the same outcome but later and much worse. Yet now he proclaims prescient knowledge of (supposedly non-existent) deflation. You can't know what happened but I think Mervyn did a good thing just kicking him out.
Branchflower was kicked off the worst performing monetary policy comittee in the history of the UK and possibly the world for being useless and untrustworthy.
10. paul said...
There's an awful lot of headlines recently starting "Blanchflower says ... ".
I bet Mervyn utterly regrets hiring him. Rightly so - he was a single issue Yankee whose added value to the MPC from his stateside home 'live on videolink' was always deeply questionable.
11. mander said...
Mr. Blanchflower,
Cutting rates and printing money is not the solution, that is called playing games and it only affects this country credibility. Now we are not USA to afford this game.
12. sirgoogle said...
If I remember correctly, it was Blanchflower that voted for the interest rate cut in 2005(?) that sparked off the second part of the housing bubble - just at a time when house prices were stabilising. He is discredited and should not be given the oxgen of publicity.
13. charlie brooker said...
What do we want?
Replace the MPC with the HPC!
When do we want it?
Now!
14. Steve said...
sirgoogle
He didn't join the MPC until 2006. I suspect the enormous volume of fradulent and unsustainable mortgage lending probably had more to do with keeping house prices inflated from 2004/2005 onwards
15. the number cruncher said...
Blanchflower is a dangerous opportunist populist - completely untrustworthy
He is trying toi be all things to all to the disillusioned, without intellectual rigour.
16. fancypants said...
Mr Number Cruncher gets closest to the truth here, I think.
Tapped up by the Tories, this will now be used as another line of attack on Brown - "your whole MPC idea is so flawed, even ex-members are calling for it to be disbanded!"
17. phdinbubbles said...
@NC
He's going to be even more popular in a couple of years! - he won't just be the only member of the MPC that was prepared to said there was a recession coming, but the only economist (appearing in the main-stream media) that said house prices would fall after the 2009 bounce.