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‘Central Banks for the Bankers!’ IMF/EU vs. Hungary

The usual suspects, the mainstream corporate press, the IMF and the EU, are ganging up on Hungary because it has passed a law creating greater democratic control over its central bank. When did it become the role of the IMF and the EU to defend ‘Central Banks for the Bankers!’?? Oh, with the passage of the Lisbon Treaty, which outlaws democratic control over central banks.

But isn’t ‘independence’ from us and subservience to ‘them’ our primary problem these days? Financial systems, economies, are being run for bankers and their clients, big investors (sometimes called ‘the market’ by the mainstream press). And look what a helluva job they’ve done!

In contrast, I read in the history books that during the West’s economic golden age, from roughly 1945 to the early 1970s, the following was considered ‘normal’:

you do emerge in the post-war boom years with a clearer understanding of the central bank as an arm of the state, albeit a relatively independent arm; and the culture emerges that the central bank has to meld its activities with the national interest of states within a global system, rather than – as was sometimes the case in the era of Montagu Norman et al – a private club representing the supposed “interests” of the finance system.

Ah yes, the lovely boom years. Great leaps of social progress during those times too. But, can’t have any more of that. So now Eurocrats are saying stuff like this:

“The governor [of the Bank of Hungary] cannot be subservient to a government appointee, that would effectively reduce him to a vice president without independence, with a commissar above him.”

And, OMG, look what the government might do with central bank reserves once it gets is hands on them:

“… Index.hu, a Hungarian information service with close government links, yesterday said that the government in Budapest wanted to use the Bank of Hungary’s reserves to service public debt and launch economic recovery measures.”

Now, I’m just saying, but I bet spending bank money on that kind of stuff could put a cramp on profits and banker bonuses.

[The above is about democratic control of central banks, and obviously not about any other aspect of the present Hungarian government policies or the new constitution there.]

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