David Blanchflower calls for Mervyn King to go
The Mole: Bank governor has overstepped the mark by ‘co-authoring’ coalition policy, says economist
It was inevitable that there would be calls for people's heads in the wake of the WikiLeaks revelations. Julian Assange, talking to Time magazine via Skype from an "undisclosed location", says Hillary Clinton should take the fall for encouraging staff at the UN to spy on the secretary-general. And 'Air Miles' Andy, the Borat of Kyrgyzstan, has been urged to stick to golf in future.
But the first serious contender for the chop is Mervyn King, Governor of the Bank of England, and the man calling for him to go is the highly regarded economist and former member of the Monetary Policy Committee (MPC), David Blanchflower.
Writing for the Guardian this morning, Blanchflower says he has always found King to be "one smart guy" but adds: "Unfortunately, it is his thirst for power and influence that has clouded his judgment one too many times."
The final straw for Blanchflower is today's revelation from the US embassy cables. We now know that King told the US ambassador to London that David Cameron and George Osborne lacked experience, dealt in broad generalities and "had a tendency to think about issues only in terms of politics, and how they might affect Tory electorability".
It's bad enough that King should stick his nose into politics with this "devastating critique". But what really upsets Blanchflower - and why he says King must step down - is that, according to the leaked cables, the Bank Governor took it upon himself to persuade Cameron and Osborne to embark on a programme of severe cost-cutting to tackle the national deficit.
Never mind that Blanchflower has long argued that this is economic madness and that we should be spending our way out of recession. The point is that in "co-authoring" the coalition's strategy on the deficit, King has overstepped the mark.
"He [King] has committed the unforgivable sin of compromising the independence of the Bank of England by involving himself in the economic policy of the coalition," says Blanchflower. "He is expected to be politically neutral but has shown himself to be politically biased and as a result is now in an untenable position. King must go."
Blanchflower recalls that during his time on the MPC, King always made it abundantly clear that members should not comment on fiscal policy and that they stay out of party political matters.
"He has failed to follow his own advice," says Blanchflower. "How could Ed Miliband or Alan Johnson ever trust King to give them advice on economic policy, now he has shown his true party political colours? Once independence has been compromised it can never be restored."
Neil Clark in his column for The First Post today argues that it's time WikiLeaks addressed itself to unearthing the machinations of bankers rather than politicians because it is they who rule the world. Clark wrote it yesterday, before today's revelations about Mervyn King were posted. Very timely. ·