Merv the uncaring Swerve

Mervyn King has always been something of an unsavoury figure- he gained his nickname of ‘swerve’ after constantly avoiding instances of accountability or responsibility, changing in a snap fashion his approach to situations and even ideology as soon as either became unpopular or seemingly ineffective. For an example of such inconsistency one need look no further than King’s decision to not fund Northern Rock Bank in 2007, utilising the argument that the Bank of England was the ‘lender of last resort’- upon the revelation that this was precipitating a run on multiple other banks, therefore the subsequent nationalisation of them, Mervyn in a complete U-Turn spurned his previous stance and began to support all newly nationalised banks- the damage to the taxpayer had already been done however. Taking into account his past criticising of EU and US policies of intervention in relation to this new strategy, Mr King appears quite the hypocrite.

When you combine this with the relatively recent disclosure via Wikileaks that the governor is overly politicised in a position that demands complete neutrality, King’s credibility seems even more diminished. Sure, he may have said some things to the US-UK ambassador about Cameron and Osborne that writers on this blog (including myself) may agree with, but that’s immaterial here. Ultimately, when it’s considered that under him, the value of sterling at one point declined against the US dollar and Euro by up to 30%, it can be concluded that the man simply hasn’t been great at his job.

Which is why it is doubly offensive to hear King tell a nation already feeling the slowly closing jaws of the coalition government’s cuts agenda, that a decrease in the general UK standard of living is an ‘inevitable’, ‘necessary’ price to pay to combat the ‘aftermath’ of the economic downturn. The notion, of course, that we have entered the ‘aftermath’ of the crisis or indeed have even exited recession at all has been rendered nonsense thanks to new knowledge on 2010’s last quarter. But that’s really just where the appalling nature of Mervyn’s recent Newcastle upon Tyne speech begins.

Telling workers that their income will be no greater at the end of the year than it was in 2005 is depressing news to deliver indeed, so King gave the announcement that coalition air of ‘it’s a sacrifice that we all must make’. The fact of the matter is that this fall in living standards- the most protracted for more than eighty years- will not cause any noticeable difference to the lives of the wealthy- to the life of Mervyn King- earning as much as in 2005 is no hardship to these people at all, so for the governor to dictate to the masses that having to accept these circumstances in terms of wage rise is ‘necessary’ can not in any way be construed as fair. The ‘we’re all in this together’ message is always unsurprisingly utilised by the powerful and wealthy in our society, and as a result always falls flat- the almost nonchalant manner in which King made the statement displays how out of touch an individual he is- the devastating effect of government cuts and inflation, combined with such small increases in real wages will hit the poorest in our society, and even the middle earners extremely hard. The apparent willingness of Mervyn to submit to this eventuality even makes him appear callous in relation to his connection to ordinary people, to an extent. As the man who controls the country’s interest rates and has so much influence, this is unacceptable.

Furthermore, to talk of the general public paying any kind of further ‘price’ for the greed of bankers is disgraceful- after the tax payer has already spent so much bailing out the banks, even if there is to be some detrimental effect to real wages, is it really feasible to be wording it in such a way that implies ordinary people still owe something? Especially when it is considered that in addition to what I’ve already discussed about King being an instigator for the banks initially collapsing, that his lack of advice to the Brown administration regarding bank regulation also contributed to the crash- does he really have the authority to lecture on what ‘price’ the people need to pay?

The unions have been in uproar ever since King made his speech, they will be for some time to come, and they have every right to be. The coalition claims its policies to be progressive- I fail to see how policies that help lower standard of living at rates like it’s the 1920s again can be defined as such in any way.



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