Tony Yates is unhappy with Mervyn King: Tony Yates: Why Mervyn King’s Defence of Brexit “Isn’t Worthy of a Bank of England Governor”: "Mervyn King, Mark Carney’s predecessor as the governor of the Bank of England, has burnished his Brexit credentials in an opinion piece for Bloomberg. King has made his pro-Brexit views known already. The trigger for reprising them was the publication of the Bank of England’s assessment of different trajectories either through or without Brexit...
...In 2013 he is quoted as saying “you just cannot appear to do anything which potentially makes life difficult for your successor.” Apparently, the dictum was so important that King would determine not even to think bad things about the next governor. “Even to talk about what is going on at a lunch or dinner in London, you don’t want to do it. And from that follows a wish not to think about it.” These scruples are spectacularly set aside in his latest op-ed....
He takes issue with the large negative impact on the economy (surpassing 10 per cent of GDP) estimated by the bank in the scenario it identifies with a disorderly exit to World Trade Organisation terms (otherwise known as “no deal”). But he doesn’t really offer much of an explanation of why.... He does not mention that the projection is not the bank’s guess at the expected outcome of “no deal”, but a scenario designed to inform stress tests of the banks. This is, to put it mildly, rather flimsy evidence on which to build an accusation of a politically motivated conspiracy. A conspiracy that would require considerable sophistication, not to mention executive team and staff discipline to hold firm without leaks. And the outcome of which is a report in the spirit of the overwhelming consensus of economists who have looked at the matter.
Some readers may discern the irony in the charge King levels at the bank. They might recall how King allowed himself “to be drawn in” to expressing an opinion–prompting the objection of fellow MPC members–on the relative merits of the fiscal plans on offer, both before and after the 2010 election. Offering no more than his words at the time, his conclusions would have also appeared rather “black box”. And they might have been taken to be designed to “scare the country into voting” for austerity....
King sketches the consequences of acceding to Theresa May’s deal in the most graphic terms, as a “betrayal” and leading us to “this state of fiefdom”. He thinks that ultimately the withdrawal would be cast off anyway: “vassal states do not go gently into that good night. They rage.” It is not clear, but one might hope that “rage” in this misquoting of Dylan Thomas refers simply to not respecting a Treaty. As Dan Davies remarked, after a referendum campaign in which an MP was murdered, hysterical and ambiguous warnings like this are irresponsible.... In common with other Brexiters, King thinks that the government should and could have made “no deal” a credible fall-back position: “Preparations for Brexit based on trade under WTO terms should have started in 2016”. But what preparations, short of vast investments in physical, IT, and administrative systems, would have helped? What use would they have been without reciprocal investments with EU countries bordering us? And in Ireland too? How could such preparations have born fruit in time? The former head of a public body that wilted under more mundane administrative challenges, and used to struggle fitfully to roll out updates of Microsoft Windows, many years post release, does not explain....
The class of which he speaks–he is not confining his ire to 10 Downing Street–is too divided to be treated like a single entity guilty of “incompetence on a monumental scale”. But if there has been a failure, it was of the faction to which King wishes to lend his heft: in its dissembling about the economic consequences of Brexit and about the political choices and trade-offs facing the country. These failures seem most responsible for the current predicament of the UK and they are contained in microcosm in King’s article....
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