One of the most pressing problems facing the population of the United Kingdom has been the counter-evolutionary degradation in the real income levels of the population over the last century with the pound sterling having been reduced to less than 1% of is value in 1920. This process has been driven by macroeconomic policies that have nurtured a culture of increasing private and personal debt and a rising disparity in wealth and income. Government policies have, on balance, favoured a small minority of those who deal in assets, including land and real estate where a constant inflation has also been associated with rising rent and house prices while the ability of the majority to pay their mortgages and rents has declined. Today, as a direct result of government policy, fewer people can afford to purchase houses and pay rents.
The seventh part of this series entitled, "Unraveling the mystique of monetarism" explains how monetary policy, and in particular quantitative easing, is fraudulent in the sense that the monetary models do not represent reality and in therefore do not work as politicians assert. Most of the time, monetary policy transfers money away from the majority of the population to a small group of asset holders. This group, rather than invest in the real economy to secure higher productivity, employment and rising real incomes, trades assets amongst themselves in a speculative market, beyond the reach of the majority, to become yet more wealthy.
A central problem and cause of this destructive decadence in economic policies is the result of the governance agendas and elections being in the hands of political parties which in total have a membership of less than 1% of the electorate of this country. And yet, it is this faction that sets the policy agendas for all. Political parties are very convenient vehicles for asset holders to gain influence over the power of governance because they are so tiny and most members are not versed in the operation of asset markets because they don't feature in their lives. What is essentially petty cash for asset holders is enough to have political parties writing their agendas and manifestos to align with the interests of asset holders. During the last 50 years asset holders and large corporations have funded academic departments, business schools and think tanks all of whom promote directly or indirectly, policies that enhance the position of asset holders.
In a sleight of hand, Gordon Brown, who had observed the fiasco under the Conservative government associated with house repossessions following a bout of high interest rates leading to the demise of the Thatcher government, made the Bank of England independence on 6 May 1997 in his first Act. This was no act of responsibility it was a way to distance government decision-making from the repercussions of poor economic policy decision outcomes; a political insurance policy. It was an abandonment of political party responsibility for fundamentally important aspects of governance. Anyone who studied economics before this event is likely to have been presented with the question, "What are the advantages and disadvantages of Bank of England independence?". After answering this question on different occasions it becomes fairly obvious that this does make a fundamental difference to the constitutional duty of governments to protect the economic wellbeing of the majority. Since economics examiners were looking for answers related to economics, this fundamental and more relevant observation would have been more likely to be assigned a low mark. The point missed is that if the Bank is independent, the obligation of exercising this duty of care by political parties and government, is lost. An "independent" Bank of England gains the freedom to shift its focus to its natural constituency, asset holders, land owners, real estate sector, banks, financial intermediaries and insurance companies.
The Bank of England generated a considerable amount of dishonest propaganda see right. This appeared on the occasion of 20 years of independence in a BoE conference where Bank's web page covering this event states, "We gathered a wide range of speakers to discuss what it means for a central bank to be free from political influence in London on 28-29 September 2017." This show took place just nine years after the introduction of quantitative easing (QE) following the 2008 financial crisis. This crisis was a direct result of lack of monetary policy oversight and widespread criminality within the financial sector. In spite of awareness as to the cause of the crisis, up until the date of this conference, QE had continued to enrich asset holders and impoverished most constituents while exterminating the ability of people to save money as a result of close to zero interest rates. Since that conference, QE has continued.
This is a case study of the problem. British political parties have abrogated their responsibility to concern themselves with monetary policy and to manage this in government to ensure it operates in favour of the majority of constituents.
With such small political parties, controlling the asset holder's agenda is impossible because of an obvious lack of intellectual critical mass within our political parties. The indicators include no logical questions being asked either by their leadership, membership or constituents on this fundamentally important question. The financial intermediation sector lobbies have more power over political party and government decision making than the whole of the British electorate. Since political parties set the agenda based on the wishes of their puny members constituting less than 1% of the British electorate, this is hardly a participatory democratic process. All decisions are controlled by tiny factions that have no legitimate claim to represent the constituency of the United Kingdom. As a result of the incessant assertion-based propaganda pumped out by the mainstream corporate media whose interests are to mislead in return for advertising revenue from assets holders and large corporations, the constituency remains intentionally denied essential facts.
The natural question arises as to whether our political parties knowingly ignore these facts as a result of dishonesty or is this a failure to admit they have no understanding of mechanisms of monetary theory and its destructive impact in practice, so they leave this it to the mystique and expertise of the BoE. Opposition parties lead a chorus that blames "government austerity" for our ills when in reality it is the massive destructive impact of the BoE's QE that has run for over a decade that is the problem. This suggests an extreme level of incompetence in understanding the issues at hand or a holding off from criticising the dominant influence of asset holders over most decision-making, including their own. In conclusion, the government clearly colludes with the BoE to continue with QE demonstrating and extreme incompetence in safeguarding the interests of constituents while assisting asset holders. This has also shown a worrying level of dishonesty by such people insisting that the economy is safe in their hands when they clearly have no control over its practical outcomes.
Covid-19 has brought home to many the reality of how precarious our existence has become under various British political parties with most having no savings and therefore lacking even a minimal level of freedom and independence to remain without work for more than a day or so just to pay bills and credit card debt. Our predicament and even the continuing Covid-19 fiasco is the result of policy decisions by incompetent or dishonest political party leaderships.
Boris Johnson's presentation concerning designing economic policies based on incentives to promote greed to help those with high IQs to rise to the top, has certainly, under BoE tutelage, succeeded in institutionalizing irresponsible greed. In addition, the types of intelligence administering this endeavor are ill adapted to managing these affairs to address the needs of the voters throughout the United Kingdom. They lack the constitutional responsibility, practical models or intelligence to address this issue. The assumption appears to be that British voters are so ill-informed and docile (read low IQs) that they are expected to accept the BoE and government's failure to admit the real intent of their policies. Voters are expected to endure the insult of the avoidance of admission of the self-evident policy failure in achieving stated objectives. In short, the government expects the people of this country to tolerate this continuing economic incompetence and the continuation of this exceedingly harmful policy-imposed decadence, without question.