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The graph below – courtesy of the International Herald Tribune – does not look like a dagger – but a dagger is what it is when pointed at a vast bubble of credit. Unfortunately there are central banks like the Bank of England and the Bank of Hungary that have not blunted their daggers, or indeed are still sharpening the dagger.
I wrote a piece on Keynes and monetary policy for the Standard, which appeared on Thursday, 23rd October, 2008. You can read it below. Today a group of monetarist economists , supported by a range of bankers, have written to the Telegraph objecting to a public works programme to help economic recovery. They are right that excessive liabilities on the government’s balance sheet could cause interest rates to rise, but government spending has a multiplier effect, and very quickly pays for itself. They seem unaware of this economic fact. There is some overlap between our views on monetary policy as an effective tool, but I disagree with their view that UK government spending has been excessive.
I am dictating this piece down the phone from Budapest in Hungary where I have just arrived to deliver a lecture to the Ybl Club. My hosts were in a state of shock on arrival because the central bank of Hungary has just raised interest rates from 8.5% to 11.5%… 11th October, 2008
The sin of usury, diluted by Eck and the Fuggers banking family in the 1500s, ceased to be condemned as a sin after John Calvin (pictured) gave a license to the charging of interest. Usury as a sin should be brought back now, I argue in the columns of the Guardian today.  9th October, 2008. Central banks’ obsession with inflation is stopping them from tackling a far more pressing threat. Both the British Chancellor, Alastair Darling and the shadow Chancellor, George Osborne, have been on the radio this morning, resisting the idea that interest rates are political. Instead they have argued, vehemently, that the Bank of England is independent, and that the Bank must decide whether or not to lower interest rates.
In this big bad world of the Credit Crunch, powerful central bankers – civil servants all – have bent over backwards to help powerful and rich private bankers.
Have been listening to debates about the conflict in Georgia over the week-end. There has been much wailing and gnashing of teeth about Putin’s disregard for democracy. In a similar vein, western commentary about President Hu Jintao’s Olympic Games is never complete without some tut-tutting about democracy and human rights in China. Yet these leaders have in reality much in common with Alan Greenspan, former chairman of t he US Federal Reserve, who is held in the greatest esteem by western commentators. He came to London recently to promote his book, and I “It has become hard for democratic societies accustomed to prosperity to see it as anything other than the result of their deft political management. In reality, the past decade has seen mounting global forces (the international version of
Their insolvency now threatens a global systemic financial crisis, and their taxpayer-funded bailout of shareholders, bondholders and an incompetent management exposes the hypocrisy of much neo-liberal cant. |
In the September 2003 edition of openDemocracy I wrote: 
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