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“I’m Andy, and I’m a central banker,” said Andy Haldane, the Bank of England’s chief economist, to a ripple of laughter as he began a TEDx talk in Glasgow. “It wasn’t actually a joke, but thank you,” he added.
Central bankers and economists are not known for their humour, but Haldane’s speech would have fitted in as easily at a standup club as among the neoclassical columns of the 324-year-old Bank of England.
As well as the jokes, Haldane told the audience that in the aftermath of the financial crisis he learned more from speaking to charity workers and people in the street than he did from “all those economists and all those company bosses”.
It is his easy manner and confidence to speak his mind, even when his views ruffle feathers, that put Haldane in the spotlight this week in a speech warning of the economic damage that could be caused by fears about the impact of the coronavirus.
A savvy PR operative, Haldane knew to insert a memorable and easily understood phrase to get noticed by the TV news channels and newspaper front pages. “Now is not the time for the economics of Chicken Licken,” he said, in the speech to the Cheshire and Warrington local enterprise partnership on Wednesday.
He was referring, of course, to the children’s folktale about a chicken who believes the sky is falling in after an acorn falls on its head, and worries that the world is coming to an end.
“We need to prevent healthy caution morphing into fear and fatalism,” he said. “Pessimism can be as contagious as the disease, and as damaging to our economic fortunes.” Just before he made the speech, official figures had showed that in the second quarter the UK economy was 19.8% smaller than a year ago: an extraordinary dive, although slightly less deep than at first feared.
But Haldane pointed out that the economy would have recovered to be just 3-4% down by the end of the third quarter. He urged caution to prevent the spread of coronavirus, but added: “Encouraging news needs not to be drowned out by fears for the future.” Pessimism, he said, could be as damaging to the economy as Covid-19.
The speech led the Daily Mail to declare on its front page that Haldane, 53, was “Mr Boom”, in contrast to the prime minister who was labelled “Mr Doom”.
It is not the first time that Haldane has stood out among the often rarified and academic world of central bankers. A speech he gave at a central bankers’ meeting in Jackson Hole, Wyoming, in 2012 garnered worldwide headlines, as much for its title as its message.
The “dog and the Frisbee” speech, described as “radical” by the Financial Times, argued that “to ask today’s regulators to save us from tomorrow’s crisis using yesterday’s toolbox is to ask a border collie to catch a Frisbee by first applying Newton’s law of gravity”.
While many central bankers can see themselves as there to serve bankers, Haldane has regularly made the point that central bank lending rates and global economics matter to everyone and he is there to serve everyone.
In 2012 he backed the Occupy movement protesters, saying they were right to criticise the global financial system and their actions had helped push politicians and bankers to “behave in a more moral way”.
Haldane told a meeting organised by Occupy in London that their protests had touched a “moral nerve”, adding: “Occupy has been successful in its efforts to popularise the problems of the global financial system for one very simple reason: they are right.”
He said the protests were “a response not just to the fact that the world is poorer, as pre-crisis riches have turned to rags, but to the way these riches were privatised, while the rags are being socialised”.
He went on to pen a 3,000-word essay for the London Review of Books criticising the huge sums paid to bankers, who at the time collected 320 times the average UK income.
Inequality has driven Haldane since childhood. He grew up in a working-class household in Guiseley, Leeds, where his father was a professional trumpet player and his mother a stay-at-home mum.
“Growing up the 1980s with 3 million unemployed, that is why I studied economics,” he said in an interview with Warwick Business School’s magazine. “Because I could see the real implications of the economy going wrong, for my friends, for my local community.
“I asked myself: ‘How do I make sense of this … ? What can be done to stop it happening?’
“Those are the questions I asked myself when I was 13 or 14 and those are the same questions I ask myself today, it is why I get up in the morning and have come here [to the Bank] for the last 30 years. How can the economy do a better job for society? My career has been about that.”
He may be the nation’s chief economist, but that does not mean Haldane has always been good at maths. In a video for National Numeracy Day this year, he said he was “very far from being natural at maths”.
“It is something that’s only too apparent now that I’m trying to teach my kids at home,” he said. “I didn’t do A-level mathematics which is very unusual actually for an economist.” He thought himself maths, before studying economics at Sheffield and Warwick universities.
Haldane, who is chair of the government’s Industrial Strategy Council, is considered a possible successor to Andrew Bailey as governor of the Bank of England. If he ever gets that job, he will be the first not to have been educated at Oxford or Cambridge.
Asked how he would describe his job to a schoolchild, Haldane said: “It is looking at numbers of jobs in the economy, incomes in the economy, and the cost of living, and trying to glue those numbers together like trying to solve a giant soduku puzzle really”. And in the end, hopefully, “making sense of how well or how badly the economy is doing”.
Source: The Guardian
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