Wednesday, 24 April 2013

No One Is In Charge

It's a pity that we only get an insight into the shortcomings of most organisations when people leave them.

Two of the more recent insights have come from John Gieve, a former deputy governer of the Bank of England, who is wringing his hands about who is "in charge" of the UK economy; and Lorenzo Bini Smaghi, a former member of the European Central Bank’s executive board, who has reportedly told the IMF: “We don’t fully understand what is happening in advanced economies.” 

One would have thought it was pretty bloody obvious to anyone who had loitered among the top brass of the economic establishment that no one is in charge. I mean no one is in charge of even understanding how the British economy fits together, let alone actually tasked with managing it as a system. Everyone is organised into silos that barely interrelate. Surely the UK is not alone in this.

It's naive of central bankers to be still anxiously discussing their lack of understanding and leadership, especially given the events of the past decade. Our economies are a fairly loose collection of economic victims, rather than cohesive units that operate together as part of some grand scheme.

So, shouldn't we be facing the fact that events are outside of our control, and breaking open the silos, instead of pretending that the great and the good in our Treasuries or Central Banks have all the answers?

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