Third, in reality, bankers were given only one tool to deliver on the task given to them, which was the control of interest rates. This tool is, however, almost useless when inflation is rising because it is far too blunt a tool to use without creating considerable social friction. And when rates are low it is also useless, because as has been seen for much of the period of independent central banks, rates had to be near zero, leaving them without impact.
That near zero interest rates were the right policy to avoid deflation and that they worked now proves that near zero interest rates have no effect upon inflation.
Man’s an abject fool.
First, until now we have had no serious inflation since the early 1990s, which was well before Bank of England independence. The reality is that they have never done their job: other factors have weighed on inflation instead.
The actual argument for independent central banks is that interest rates will be lower for any given worry about future inflation if the central bank is independent. Because we know that politicians will try to time things for the electoral cycle – in favour of their being re-elected. Taking the decisions out of their hands reduces risk – therefore interest rates are lower for any particular stage of the inflation/boom/bust cycle.
Man’s a fool.
Fourth, changing taxes was always a better tool to tackle inflation, with a much greater degree of finesses in the targeting and so the likely result,
Citation required. For the general economic consensus is that fiscal policy can indeed be used but with greater time lags and less accuracy than monetary policy.
Fifth, quantitative easing was never used as it should have been. It should have been used to inject money into the economy very largely as direct investment.
Then it wouldn’t have been quantitative easing, it would have been direct monetisation of fiscal policy.
Sixth, put in place capital controls to stop the upward direction in house prices.
Seventh, deflate capital markets using seriously progressive taxation on wealth, including by reintroducing withholding on overseas holdings.
The man who wants to increase investment in the British economy now wants to reduce investment in the British economy?
Abjectly ignorant foolishness.