Mervyn King is on a salary of £305,000
and will be paid around £200,000 a year as a pension when he retires shortly. It's lucky for him he isn't paid by results. His latest pronouncements revise (ie contradict) his and the Bank
's previous ones. Now it will be 2015 before the economy is back at "pre-crisis" levels. We're not in a crisis now?
The Bank of England's latest inflation report
is full of graphs and flim-flam, but doesn't really tell us anything. So what should he and it do?
At page 52, the report reveals the Bank will "continue with its programme of asset purchases totalling £375 billion, financed by the issuance of central bank reserves". This is the Bank's Quantitative Easing programme, the one Vince Cable didn't mention when he was talking about finding a mere £1 billion
Creating cheap money as above is clearly the right thing to do: when money is cheap, economic activity increases, but QE is cheap money for the banks, and for speculators, who "make money" without creating wealth. Instead of purchasing assets - bits of paper - the Bank should divert this new money to productive companies and to infrastructure, including creating real jobs in the public sector. To do so would probably need not simply a change in the law but a change in the mindset of the Government. Not to mention a change at the Bank of England.