We shouldn't be hanging on the every word of Britain’s new "superstar" central banker

Britain's economic debate needs to be more daring than the Bank of England can ever be, writes Jeremy Green.

Mark Carney’s "forward guidance" announcement yesterday was a new departure for the Bank of England. A publicly announced unemployment target will now help guide interest rates. Many had anticipated that Carney might introduce unorthodox policy measures, and in plumping for an unemployment target he has followed the lead of Ben Bernanke at the Federal Reserve. The measure is intended to assure markets that borrowing costs will remain low going forward, with the hope that this will spur further spending and investment in order to drive Britain’s fragile recovery.

It’s important not to place too much emphasis on the novelty of this announcement though. The Bank has not abandoned, or significantly relaxed, its commitment to price stability. The unemployment target will be jettisoned if there is a significant rise in inflation, or if continued loose monetary policy threatens financial stability. This is by no means a revolution in monetary policy.

The fact that so much attention has been lavished upon the appointment of Carney and his early policy announcements, demonstrates the overemphasis placed upon monetary policy as the only viable escape route from recession. In fact, the overdependence upon monetary policy has been a defining feature of the neoliberal era as a whole.

Ever since the anti-inflationary policies implemented by the Bank and the Fed in the early 1980s, monetary policy, coordinated by increasingly independent central banks, has been expected to play a larger role in steering economic growth. Under the high interest rate regimes of the early 1980s it was the money supply figures that were supposed to guide interest rates and provide a benchmark for market expectations, whereas now, in the context of zero-bound monetary policy, the unemployment rate is supposed to play a similar role.

As long as fiscal policy remains shackled by austerity, then the wider benefits of a looser monetary policy are likely to be meagre. Quantitative Easing has so far done much more for wealthy assets holders and share prices than it has for ordinary wages. Channelling the proactive element of the policy response to the crisis exclusively through monetary policy actually deepens our dependence upon financial markets as the engine for recovery. Doing so without redirecting credit into long-term infrastructural investment and export-led industries will reproduce the same deficiencies that have plagued the British economy.

Cheap money is likely to be funnelled into the property market, reinvigorating the speculation that led to the crisis in the first place and further concentrating wealth inequalities. Britain’s high levels of household debt will likely be aggravated, rather than alleviated, by the prolongation of cheaper credit in the context of falling or stagnant wages.

We should be talking about a proactive industrial strategy, expansionary fiscal policy and green jobs, rather than hanging on the every word of Britain’s new "superstar" central banker.

The flip side of Britain’s proactive monetary policy has been the talking-down of the potential for an expansionary fiscal policy. Quantitative Easing and fiscal austerity are the lead actors in a damaging double-act at the heart of the Coalition’s plan to restore British growth. But the key ingredients to getting out of the crisis, and providing more and better quality jobs in the process, are not austerity and cheaper consumer credit. We should be expanding fiscal stimulus and targeted investment through increased spending and taxation – tapping into the huge corporate surpluses in Britain as a source of strategically directed investment. Supply-side measures alone are entirely inadequate.

At a more fundamental level, the power and influence of an unelected and independent central banker should be a concern for all of us. In a democracy like ours, key economic decisions should be taken within a strong mandate of public accountability, not the shadowy and esoteric world of central bank policy making. The more faith we place in central banking to lead us out of the crisis, the less we place in the policy programmes of our elected politicians.

Photograph: Getty Images

Jeremy Green is a research fellow at the Sheffield Political Economy Research Institute at the University of Sheffield.

#Match4Lara
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#Match4Lara: Lara has found her match, but the search for mixed-race donors isn't over

A UK blood cancer charity has seen an "unprecedented spike" in donors from mixed race and ethnic minority backgrounds since the campaign started. 

Lara Casalotti, the 24-year-old known round the world for her family's race to find her a stem cell donor, has found her match. As long as all goes ahead as planned, she will undergo a transplant in March.

Casalotti was diagnosed with acute myeloid leukaemia in December, and doctors predicted that she would need a stem cell transplant by April. As I wrote a few weeks ago, her Thai-Italian heritage was a stumbling block, both thanks to biology (successful donors tend to fit your racial profile), and the fact that mixed-race people only make up around 3 per cent of international stem cell registries. The number of non-mixed minorities is also relatively low. 

That's why Casalotti's family launched a high profile campaign in the US, Thailand, Italy and the US to encourage more people - especially those from mixed or minority backgrounds - to register. It worked: the family estimates that upwards of 20,000 people have signed up through the campaign in less than a month.

Anthony Nolan, the blood cancer charity, also reported an "unprecedented spike" of donors from black, Asian, ethcnic minority or mixed race backgrounds. At certain points in the campaign over half of those signing up were from these groups, the highest proportion ever seen by the charity. 

Interestingly, it's not particularly likely that the campaign found Casalotti her match. Patient confidentiality regulations protect the nationality and identity of the donor, but Emily Rosselli from Anthony Nolan tells me that most patients don't find their donors through individual campaigns: 

 It’s usually unlikely that an individual finds their own match through their own campaign purely because there are tens of thousands of tissue types out there and hundreds of people around the world joining donor registers every day (which currently stand at 26 million).

Though we can't know for sure, it's more likely that Casalotti's campaign will help scores of people from these backgrounds in future, as it has (and may continue to) increased donations from much-needed groups. To that end, the Match4Lara campaign is continuing: the family has said that drives and events over the next few weeks will go ahead. 

You can sign up to the registry in your country via the Match4Lara website here.

Barbara Speed is a technology and digital culture writer at the New Statesman and a staff writer at CityMetric.