#BTColumn – Let the blame games begin

Disclaimer: The views and opinions expressed by the author(s) do not represent the official position of Barbados TODAY.

By Adrian Sobers

“The man said, ‘The woman whom you gave to be with me, she gave me fruit from the tree, and I ate.’ Then the LORD God said to the woman, ‘What is this that you have done?’ The woman said, ‘The serpent tricked me, and I ate.’” – (Genesis 3: 12–13, NRSV)

In The First Central Bank Casualty, the Editorial Board of the Wall Street Journal opens, “The Bank of England’s (BOE) decision Wednesday to buy British bonds is being portrayed as a rebuke to new Prime Minister Liz Truss’ economic programme, and BOE Governor Andrew Bailey may have meant it to be. The intervention calmed bond and equity markets, at least for now, though at the cost of showing again that central bankers are easily spooked into rescue mode.”

Well before a ball was kicked in Qatar, the 2022 edition of The Blame Games got underway as Ms. Truss’s economic program was used by the BOE Governor in the same
manner as the pandemic, Putin, and pesky petrol producers; namely, a convenient scapegoat to shoulder the blame as the fallout continues from the biggest failed monetary policy experiment in human history. (These folks have all gall and no shame.)

The Editorial Board continues, “The BOE’s Monetary Policy Committee wants to tighten policy to break inflation. At its last meeting it said it would be selling down its quantitative-easing bond portfolio. But the BOE’s Financial Policy Committee is now buying bonds to ease financial conditions. This can’t help the BOE’s credibility as it navigates the fraught path away from the historic monetary mistakes that have produced our current inflation.”

Etch the previous sentence in your mind, bind it continually upon thine heart and tie it about thy neck (Proverbs 6:21).

A commenter on a related piece, The Bank of England’s Blame Game, correctly pointed out that: “[what] the BOE is doing is a smaller and targeted version of QE for the pension funds. But central banks need to remember monetary policy is a blunt instrument and cannot be deployed in such a targeted way and there are consequences to deploying them.”

As hard as it is to fathom, we still have not felt the full brunt of the consequences of this historic failed monetary policy experiment. The average consumer should never, ever, ever, never lose sight of the fact that if we go the blame route, it lies squarely at the feet of our monetary masters, their muddleheaded macro models, and their political bosses/accomplices who have and continue to gorge on debt.

Federal Reserve Chairman Jerome Powell said, “Price stability is the responsibility of the Federal Reserve.” You can’t make this stuff up folks. Like I said, all gall and no shame. Translation: monetary masters will never be held accountable for the greatest failed monetary policy experiment in human history that diminished the purchasing power of your dollar.

One does not need to be an economist to understand that monetary masters bent the yield curve out of shape and forced investors (especially pension funds), as an explicit objective lest we forget, onto the riskiest part of said curve. The least our monetary masters could do is stop misleading the public about rosy recovery predictions for 2023. However, alas and alack, not even that they are willing to do.

You can bet the rent the Blame Games will continue well into 2023, long after the 2022 World Cup Champion, hopefully France, has been crowned.