YESTERDAY the new head of the Bank of England, Mark Carney, officially took up the reins from the outgoing Sir Mervyn King.
Carney, formerly head of the Bank of Canada, becomes the first governor of the BofE not to be a British citizen in all its 319 year history and is hailed by Tory chancellor George Osborne as the ‘outstanding central banker of his generation’.
On closer examination however, Carney’s reputation as some economic superman capable of single-handedly rescuing British capitalism from the world crisis is not all it’s cracked up to be.
He is credited with taking swift action to ‘save’ Canada and its banks from the banking collapse of 2008.
What this completely overlooks is that the Canadian banks were nowhere near as exposed to the debt crisis as British banks – by law Canadian banks could only lend 21 times their total assets, in Britain this ratio was up at 88 times.
What Carney did do was to immediately cut interest rates to ensure cheap credit, encouraging Canadian workers and the middle class to take on more and more debt – credit after all is simultaneously debt.
Inevitably, this sparked a housing bubble that has left houses in Canada the third most overvalued in the developed world.
It begins to look as if Carney not so much stepped in to ‘save’ capitalism as bailed it out before the Canadian economy hit the rocks.
If his financial genius is not what it is made out to be, then his admirers point to his alleged hard-man attitude towards the banks.
Carney, they claim, will ‘tame’ the wild excesses of the banks and bring them to heel.
Again, his history does not bear out this extravagant claim.
Carney is, in fact, very much a product of the most rapacious global investment banking company in the world, Goldman Sachs.
He worked for Goldman Sachs for thirteen years in very senior positions, including ‘advising’ governments around the world on how best to open themselves up to the financial vultures of the world banking system.
Clearly, Carney is no stranger to the ‘black arts’ of the international banking system and the wheeling and dealing (all legal of course) that they indulge in to make vast profits while leaving entire national economies bankrupt and the working class forced to pick up the bill through unemployment and dire poverty.
This is the expertise that Osborne and Cameron in their desperation are seeking from this Canadian mercenary – throughout history the ruling classes have always used mercenaries for inflicting the greatest savagery on the population.
His appointment signals change from the academic, avuncular type of governor like King to a muscular Goldman Sachs-trained banking predator, prepared to inflict as much pain as necessary on the working class in order to keep the bankers in profit.
There is no economic solution to the crisis of capitalism, every single attempt to solve it through pumping it full of worthless paper money (Quantitative Easing) to holding interest rates down to virtually zero in the vain hope of stimulating growth in the economy, has failed miserably.
The only way out for the capitalist class is to try and put value back into their worthless currencies by attacking the only class that produces real value – the working class.
They are forced to drive down wages to poverty levels while simultaneously destroying all state expenditure on welfare.
Carney’s role is to get the Bank of England firmly on board for this class war.
For the working class, the issue is answering this declaration of war by mobilising its huge strength in a general strike that will remove this government and replace it with a workers government which will advance to socialism.
One of its first tasks will be to send Carney packing and place the Bank of England under workers control as part of a socialised economy.
