Here’s a sentence to set pulses racing: there was interesting news from the Bank of England’s Monetary Policy Committee today. I know. Seriously.
The Governor of the Bank of England, Mervyn King, wanted to pump more money into the UK economy this month but was outvoted by fellow policymakers.
Minutes of the bank’s Monetary Policy Committee (MPC) meeting on 6 August reveal that Mr King wanted £75bn rather than the £50bn that was injected.
Two fellow committee members [Tim Besley and David Miles] also voted for a bigger cash injection.
Outvoted by his own committee? This would never have happened to Alan Greenspan…
I admit to a personal interest – I was lucky enough to be lectured by Tim Besley at LSE, in a course on Political Economics. The introductory lecture was especially memorable – many lecturers try to make these as appealing as possible, to attract more students to their courses (people attend dozens of introductory lectures, then choose just a couple of courses). Not Prof. Besley.
In front of a pretty packed room (at least 40 people) He launched straight into the meat of his course, the overhead projector rapidly filled with algebra as he solved various models step by step. Putting up a particularly long and formidable-looking equation, Prof. Besley casually said ‘… And anyone not confident about solving this expression for the Nash equilibrium probably shouldn’t be doing this course.’
Needless to say, most of the 40 people didn’t come back. Those of us who did, though, ended up learning a huge amount about modern political economics – a field which is (at last) moving the profession away from rather stale arguments about Big-Government-Versus-Small-Government.
On joining the MPC, Prof. Besley rapidly established himself as the hawkiest of inflation hawks – the rate-raising nemesis to David Blanchflower’s Super-Dove. For a long while there were only two safe bets on MPC votes: that David Blanchflower would vote to lower interest rates, and Tim Besley would vote to raise them.
So that’s what’s noteworthy about today’s news. Prof. Besley, a man so hawkish he might as well wear claws to MPC meetings, thinks the UK economy is sufficiently screwed to warrant an extra £25bn in pump-priming.
For the love of God – somebody write the man cheque.