Whoa, here's something you don't see everyday. Even if Ben Bernanke is not a favourite in these parts for his easy money policies, the worst jibes I've slung in his direction are those on helicopter drops and whatnot which he of course has spoken of in the past. However, it seems his British counterpart Mervyn King--yes, formerly an instructor at the LSE--has it worse. Much worse. Today, the Bank of England governor gave a speech before the Trades Union Congress (TUC)--the UK equivalent of the AFL-CIO.Instead of being associated with easy money policies, King is now being associated with--how do I put it--tightwad money policies instituted by the current Liberal-Conservative coalition even if he was a Blair appointee. Apparently, many didn't take very kindly to his message at the TUC. What would happen to so many public sector jobs and so forth? Those voicing ideas supportive of 40% cuts across government departments don't come across well. He incurred the particular wrath of the instigator of subway strikes which aim to paralyze London, General Secretary Bob Crow of the National Union of Rail, Maritime and Transport Workers (RMT). So yes, King has been branded the devil incarnate:
Bank of England governor Mervyn King today faced down union militants to deliver a stern lecture on the need to repair the national finances. Addressing the annual Trades Union Congress, which has been dominated by anger at spending cuts, he told delegates: “I would be shirking my responsibilities if I did not explain to you the risks of failing to do so.”It's so 1979, dahling. I guess it's good I can walk home instead of having to wait around for the mother of all transport strikes if others join the subway folks in protest. The Winter of Discontent and all that. And imagine what'd happen if the public broadcaster of Cbeebies--the BBC--goes on strike as some indicate. I guess we'll all have to eat Crow then over the still-substantial strength of organized labour. Alas, British politics is child's play.
Mr King softened his message by admitting that policymakers should have prevented the financial crisis. “We let it slip — we, that is, in the financial sector and as policy-makers — not your members nor the many businesses and organisations around the country which employ them.” He also said banks should be in future be “allowed to fail” if they messed up as long as savers were protected.
Despite his conciliatory tone, militants led by RMT leader Bob Crow staged a walkout from the Manchester hall, rubbing salt in the wound by ostentatiously watching children's television at a conference stand [Cbeebies, if you must know]. Mr Crow even compared the softly spoken governor with “the devil”, saying that the speech was like Christians inviting Satan to preach their Sunday sermon.
But Mr King told the unions that neither he nor they could avoid action to reduce borrowing. “It is vital for any Government to set out and commit to a clear and credible plan for reducing the deficit,” he said. Only the second Bank governor to attend the TUC, Mr King was politely applauded by most delegates as he took the stage. But his appearance caused consternation among many who blame him for encouraging the Coalition to speed up the deficit reduction programme, putting public sector jobs under threat.
In questions later, one union official said bankers were “greedy bullshitters” and accused him of failing in his job. There were also demands from the floor for a crackdown on wealthy tax dodgers who cost the country about £120 billion a year, according to the unions.
Mr King said he had “enormous sympathies” with public anger over bank bonuses, adding: “I understand the strength of feeling. In fact I am surprised it has not been expressed more deeply.” He pointed out that the economic stimulus provided by the Bank's quantitative easing had prevented the economic crisis becoming as severe as the Thirties' Depression.
Mr King agreed that it was “unfair” that banks were bailed out when big firms such as Jaguar had to “stand on their own feet or go to the wall”. Calling for the Bank and the unions to work together, he urged: “It will require patience and determination on all our parts, including your members. But the prize of restoring and maintaining economic stability, and a return to sustained rises in employment and living standards, will be worth the effort.”
UPDATE: The thing not many notice was that King was rather apologetic over this admittedly white-collar fiasco:
Said King: “Before the crisis, steady growth with low inflation and high employment was in our grasp. We let it slip — we, that is, in the financial sector and as policy-makers — not your members, nor the many businesses and organisations around the country which employ them.” King went on to attack bank bonuses and said that union members were “entitled to be angry”. Added the governor: “I understand the strength of feeling. In fact I am surprised it has not been expressed more deeply.”
