4 July 2016
Late last week the Governor of the Bank of England gave a highly reported speech on the British economy in the wake of “Brexit”.
Among the words picked up and broadcast around the world was the phrase “ruthless truth telling.”
The term brought me up with a start, as I chewed on my breakfast muesli. It was a catchy phrase. On the other hand shouldn’t “truth telling” stand alone? No need for adjectives, surely. Either you tell the truth or you don’t. I guess use of the word “ruthless” underscores an intention to tell the truth warts and all, without cloaking it in diplomatic niceties.
It was a pity that Carney’s well crafted words were hitting home after the referendum vote rather than before it but I understand he had indeed tried to inject some rigour into the referendum debate earlier in the piece.
He’s not a great orator. Video of Mark Carney shows him sheltering behind a rather large podium and speaking not from an autocue but from what looks like hard copy notes, in such a way that he spent half his speech staring down at his notes rather than out at his audience. http://<iframe src="http://www.ibtimes.co.uk/videos/embed/18907" width="640" height="360" frameborder="0" scrolling="no"></iframe>
He became animated when he made a crack about people being worried about their jobs and sensed that his audience perhaps wondered whether his job might be on the line.
Governors of the Reserve Bank aren’t necessarily hired for their abilities to give stirring speeches. They are, however, blessed with great teams of advisers
The link to Carney’s full speech shows that more than one person has carefully crafted this “state of the nation” piece, complete with numerous graphs and diagrams. http://www.bankofengland.co.uk/publications/Documents/speeches/2016/speech915.pdf
When I saw the words “affect heuristic” I thought the term must have been inserted by some high faluting pr person. The term “heuristic” is sometimes used by communication practitioners to convince clients that communication is indeed a profession in its own right. I was crest-fallen to read, courtesy of Wikipedia, that “affect heuristic” is a legitimate economic term. https://en.wikipedia.org/wiki/Affect_heuristic
But back to that term, “ruthless truth telling.” A little digging on the web shows that Mark Carney is not the first Governor of the Bank of England to borrow the term. Back in 2006 the then Governor, Mervyn King, used the term in a talk on “Reform of the International Monetary Fund.”
Unlike Carney, Mervyn King acknowledged the original author of the phrase – John Maynard Keynes.
It was Keynes who used the term in writing to General Jan Smuts on November 27 1919 in reference to his about to be published book “The Economic Consequences of the Peace”, post the 1st World War.
Keynes words ring eerily true in the post British referendum world we now find ourselves in. Here’s what he said:
"My book is completed and will be issued in a fortnight's time. I am now so saturated with it that I am quite unable to make any judgement on its contents……... There is a growing an intelligible disposition to withdraw (like America), so far as we can, from the complexity, the expense, and the unintelligibility of the European problems: and particularly as regards financial assistance, the Treasury is inclined, partly as a result of our own financial difficulties and partly because of the hopelessness of doing anything effective in the absence of American help, to let Europe stew……. But perhaps most alarming is the lethargy of the European people themselves. They seem to have no plan; they take hardly any steps to help themselves; and even their appeals appear half-hearted. It looks as though we were in for a slow steady deterioration of the general conditions of human life, rather than for any sudden upheaval or catastrophe. But one can't tell. ………..I personally despair of results from anything except violent and ruthless truth-telling--that will work in the end, even if slowly. "
So there’s not a lot new under the sun. While Mark Carney’s speech knocked a couple of percentage points off the sharemarket for a few hours, it subsequently bounced.
Sovereign Bank Governors around the world in the wake of the Global Financial Crisis of 2008 seem to have done a good job in steadying the ship and smoothing out what have looked like more dramatic economic shocks. Here’s hoping that the clever teams behind the scenes continue to have success.
I’ll take the carefully weighed words of a slightly boring Governor any day over the prognostications and promises of their political masters.