Posted by Richard Willett - Memes and headline comments by David Icke Posted on 7 March 2024

The Pathologisation of Prosperity

Our age has become characterised by a growing if inchoate sense that there is something undesirable and even illegitimate per se about ordinary people wanting to be more prosperous. Of course this is not stated openly and is generally an unconscious reflex. But it is there all the same: a kind of intellectual ambience, if I can put it in those terms, which holds that the nation’s wealth is not its own, and is rather a state-owned resource which Government apportions and manipulates as it sees fit in order to achieve policy objectives of whatever kind. Since this is the case, the accumulation of assets by individuals, households, families and so on – particularly the educated working and lower-middle classes – is increasingly portrayed as being intrinsically antagonistic to what Government is trying to achieve. The result is that the aspirational desire to amass wealth and pass it on to one’s children (the root by which my family, for example, found a way from poverty to financial stability across three generations) is becoming itself pathologised.

This mood has gradually permeated our institutions. And you notice it whenever you are able to get a glimpse at what the people in power really think. Policymakers say all kinds of interesting and revealing things when they believe themselves to be talking to the like-minded. This is why it is very important for the informed citizen to in particular pay attention to the ‘grey literature’, which is often published on the basis that almost nobody will read it except those for whom it is directly relevant. It generally paints a much truer picture than what you can read about in the newspapers or hear people spout in interviews.

A good example of this is a speech given in 2021 by Gertjan Vlieghe, then-External Member of the Bank of England’s Monetary Policy Committee (MPC, the body which decides the Bank’s base interest rate), and now economic adviser to Jeremy Hunt (the man who purports to be the U.K.’s Chancellor of the Exchequer). Vlieghe’s credentials speak for themselves. He is a clever man – obviously much cleverer than I am. But he is also a consummate economic establishment insider. And paying attention to the kinds of things he says to fellow economic establishment insiders therefore gives us a window onto what one might call the intellectual ambience of modern economic governance. The results, to say the least, are intriguing. And they demonstrate in a quite nuts-and-bolts sort of a way the extent to which the ‘intellectual ambience’ that I earlier mentioned has filtered into what ought to be the least political and most pragmatic of our institutions – the Bank of England.

The speech, titled ‘Running Out of Room: Revisiting the 3D Perspective on Low Interest Rates’, has an otherworldly quality to it when read from the perspective of 2024. Statements like “I have not changed my view that this inflation peak is likely to be temporary” and “[W]hen tightening does become appropriate, I suspect not much of it will be needed” must have sounded very sensible in July 2021, but raise a sense of alarm when read now. Not only is Jeremy Hunt at the helm, but he is being advised by people too hubristic to admit that they have the same predictive powers as a chimp tossing a coin. But this is not the place to dispute its substance, which I am in any case much too thick and ignorant to do; what we are chiefly interested in here is its approach to economic affairs and what that tells us.

The speech concerns the reasons why in Vlieghe’s view the natural or ‘neutral’ interest rate (which you can think of as the interest rate that would be at the sweet spot where the economy is neither being artificially stimulated nor contracted) is likely to remain ‘persistently low’ (as it is inferred to have been in most developed economies for a long time), and what to do about it. This matters for the Bank of England because the lower the natural interest rate, the less ‘policy space’ there is. In layperson’s terms (and I should say straight away that I am very much a layperson, being merely a humble lawyer who just likes to ask awkward questions and read obscure books), if the neutral rate is low, this means that the bank will not see much bang for its buck in terms of wheezes to stimulate the economy if it ‘needs’ to, whether through lowering and then raising the base or ‘policy’ rate or through quantitative easing. And this in turn means it will not be able to do very much to help if there is a downturn. Its main policy levers in such circumstances will in short be largely ineffective if pulled.

Read More: The Pathologisation of Prosperity

The Dream

From our advertisers