About three quarters of the way through the session there are questions from Steve Baker MP, Brexiter and Tory, no less.
Remarkably he asks about Modern Monetary Theory (MMT).
He is told, when he asks about writing off QE bonds, by Bank of England Governor, Andrew Bailey ‘if only it were that simple’ without further explanation! Though later it was established, that undoing QE was likely ‘going forward’ (whatever that means – can we actually go backward in time?).
Bank of England economist, Andy Haldane suggested that MMT was neither modern nor monetary nor theory, which is hardly original – and part of the problem of the nomenclature.
Governor Bailey then said the problem with the Stephanie Kelton’s ‘Deficit Myth’ was that although he had read it(!) he didn’t believe that that she thought the the ‘highly’ independent Bank of England should be independent at all.
This is drivel of course, we only have to look at the letters of Alistair Darling to see that Bank of England independence was never, actually the case. The Treasury and the the Bank of England are forever entwined.
The suave Mark Carney could probably endeavour to pull that idea off, Andrew Bailey finds it, I suggest, much more difficult.
Whilst we have a right wing MP asking about MMT and being assured by the Bank of England of the concept’s reassuring lack of credibility, progressives, need, I suggest, to contact their Labour MP’s with their conviction of the reverse!
Precisely because this Bank of England seems actually to know of little, but its delusory, reassuring, independence…