A Thumping Pay Rise For Central Bank Non-Execs?

I was bemused to see the call for a giant pay-rise for the Bank of England's non-executive directors earlier this week. Especially given last week's admissions by certain former central bankers that no one is in charge and they don't understand how advanced economies actually work - not to mention last year's independent findings that the Old Lady of Threadneedle Street suffers from undue deference and group-think.

Surprisingly, the argument for the pay-rise is not that inflation has increased above the Bank's own target (a bit close to home), or that the value of their work has shot up dramatically in the light of global economic events (er, it's arguably gone down). 

No, apart from an 'increased workload' (which the FT interprets as a reference to the aforementioned independent reports, prepared by others), the central rationale is that they're underpaid compared to the non-executives in other (failing) banks. Apparently it's a bit unseemly for the non-executive directors of such a grand old institution to be effectively donating their services, and a pay rise will 'boost their prestige', as the FT puts it. One "reformer" is even quoted as saying:

“Continuing to call this body the court and paying people so little conveys the wrong impression externally.” 

Fans of corporate politics might sense that someone is teeing-up the existing non-execs, like so many golf balls, ready for the new Governor to drive them into oblivion. 

Farrago

You've got to hand it to Nigel Farage. I don't know whether it's the cigar, the pint-fuelled interviews, that he survived a plane crash caused by his own campaign banner or the fact that the UK's leading proponent of immigration controls is an elected European official with a German wife. Whatever it is, Nigel Farage has breathed some life into UK politics.

Not that I'm a Ukipper, as it were, or a "clown", "fruitcake", "loony", "closet rascist" or anything else that the Autometonians have surprisingly labelled Nige's new best friends. And I'm no supporter of the other guys either. The Lib Dems are strangely inert, apart from some genuinely helpful peers. And anyone familiar with my take on Nude Labour will certainly gather that I'm no fan of the Two Eds. Old wounds from the Brown Years begin to seep whenever their mugs fill the screen - especially that of Balls. There's a terrifying zeal in those eyes...

Nope, I can't bring myself to support any of the current crop of politicians or their pantomime parties. But that hasn't prevented the rise of a certain grim fascination with their squabbles, especially now that Farage has joined the fray. And recent trips to the Interior have demonstrated that I'm not alone. I reckon it'll be tough to round up a four-ball on polling day.

So Nigel, too, needs a nickname. And a word I learned for a university revue suddenly comes in handy. A "farrago" is a "confused mixture". That will do nicely.

Image from the Guardian.

We Need A Working Party

When Kenneth Clarke starts barking about "fruitcakes" and "loonies" you know the Tories are rattled. He claims to have been referring to supporters of the UK Independence Party, but the attack will have echoed amongst the supporters of all political parties:

"It is very tempting to vote for a collection of clowns or indignant, angry people, who promise that somehow they will allow us to take your [sic] revenge on people who caused it [whatever 'it' is]."

Surely this defines the entire House of Commons?

But YouGov's latest poll shows that only a narrow majority of Labour supporters actually believe politicians can improve our lot (the greatest triumph of Hope over Experience since records began). 

The rest of us tend to be more realistic. After all, the state is a means of facilitating our own personal efforts to solve society's problems, not a means of getting someone else to solve them for us. Hard work from each of us is required, not party politics. Party politics is mere pantomime. Or in Clarkey's case, just so much dogma doodoo. 

So we don't need a UKIP, or an Official Monster Raving Loony Party for that matter. We need a Working Party - a barn-raising, a bee, a 'dugnad', as the Norwegians call it. And we should lock our MPs in the Commons until they figure that out.

Image from Dogster.com.

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?

Thatcher Failed To Make It Personal

Whether you loved or loathed her, you have to be impressed that 23 years after she was hunted out of office Margaret Thatcher's funeral is as divisive as a Poll Tax riot.

Clearly Britain has failed to 'move on' from the Thatcher years, which suggests to me that the work she started was on the right track but is seriously incomplete. I mean, if her policies had been just plain wrong-headed or disastrous, Britain would have dropped them like hot coals - or the notion of 'light touch' banking regulation. Instead, we're still trying to balance Thatcher's blast of economic reality with its personal and social impact.

Whatever your politics, it's clear from all the recent commentary that Thatcher was focused solely on improving the way the failing British economy 'works'. She spent her energy arguing relentlessly with people about the nature of the problems, their causes and the improvements that should be made to resolve them. The resulting policies obviously appeared 'right wing', but this was largely by comparison with the dogmatic lunacy espoused by the economic lemmings in charge of the Labour Party and trade unions at the time. Their policies seemed predicated on the private sector operating as a charity for the public sector, rather than economic sustainability. Thatcher's opponents were not arguing either on the same rational terms or with the same rigour. Her disciplined approach ruthlessly exposed dogma, from both left and right, and homed in on the most feasible economic solution. Then she rammed it home...

While Britain's reward was increased productivity and employment, far too many of its people were ill-equipped to cope with this fairly brutal brand of politics. Thatcher is infamous for the quote that "there's no such thing as society" which is often unfairly given without the qualification she gave it. But even the full quote reveals a serious flaw in her approach:

"They are casting their problems at society. And, you know, there's no such thing as society. There are individual men and women and there are families. And no government can do anything except through people, and people must look after themselves first. It is our duty to look after ourselves and then, also, to look after our neighbours."  Women's Own, 1987.

Thatcher's words "and then" raise the issue of when, which we naturally interpret as 'when we have enough for ourselves'. But enough is never enough. Our society is obsessed with personal rights and entitlements, rather than the duties and obligations which must be performed if those entitlements are to be delivered. After all, who ultimately bears the responsibility for delivering everyone's rights and entitlements if not each of us personally? Thatcher was right to the extent that the state cannot perform our personal obligations for us - ultimately, it can only act as a facilitator for our own endeavours - but it was a mistake to assume that society would automatically benefit if each of us looked after ourselves as a first step. Perhaps this was as much a flawed belief in the 'efficient markets hypothesis' as that of Alan Greenspan (and Gordon Brown) a decade later.

At any rate, we are now faced with the fact that, in Thatcher's own terms, we are not looking after a fairly large number of our neighbours. While it's worth noting that Thatcher's governments produced consumer-oriented legislation such as the first Data Protection Act (1984), the Hospital Complaints Procedure Act (1985) and the Consumer Protection Act (1987), it took British society several more decades to establish even a basic sense of 'customer service', and most of the UK's institutions are still not designed around the 'customer'.

In my view, we will continue to struggle with significant social imbalances until we grasp the idea that society and the economy only 'work' if each of us - whether acting as individuals or employees of corporations or the public sector - acts in ways that are sustainable for both ourselves and society at the same time. It's not a matter of looking after ourselves first "and then" our neighbours, as an afterthought. Our activities have to be aligned to be sustainable. And only by focusing on our duties and obligations to everyone else will we secure our own rights and entitlements. That is the fundamental concept behind what I would call “the Personal State”. It's time we built it.

Image from DelhiNewsRecord.