Crime Against Humanity: Pensée Unique in Economics, 70
As to the scope of such fraudulent, covert, totalitarian abuse of power, Werner initially gives us an inkling of it with the “carrot and stick” strategy of the European Central Bank: when a European country lags behind on its structural reforms agenda, the “stick” is drastically dropping its credit creation in order to – as we now know – induce it to “speed up”; when a European country is advanced on it, the “carrot” is increasing its credit creation in order to – guess what – pretend its ensuing expansion is all thanks to the structural reforms. Witness: Germany for the stick, Ireland for the carrot, from 2001 onwards.
And then, after that first inkling, Werner observes: “A cursory review of statements by central bankers all over the world – including many developing countries and emerging markets – will quickly yield the finding that they have much in common, no matter where spoken. Monetary policy is not powerful, and the burden of policy action rests with other players, whose foremost task is, according to the central bank, to implement deep structural changes. Analysing the precise details of these recommended structural changes, irrespective of country or continent, they seem to consist of the same set of policies that have been dubbed the ‘Washington consensus’, as they have been advanced forcefully by the main Washington−based institutions, such as the Federal Reserve, the US Treasury, the IMF, the World Bank, the Inter−American Development Bank, and their various subsidiaries and satellites. As we saw in the previous chapter, international organizations such as the World Bank consider crises an ‘opportunity’ to implement ‘structural reform’ and ‘transfer ownership’.”
Werner adds that “Despite these devastating findings, none of the above facts are pointed out to students of economics, nor to journalists or the general public. Apparently oblivious to the facts of this world, central bankers and theoretical economists keep repeating the mantra of the importance of interest rates, derived from their theoretical models, like monks spinning a prayer mill. Those who do not have the time to check the facts are easily misled by the so−called experts who are supposed to know better.”
And that “Every bureaucracy, including central banks, constitutes an interest group, and if the overall incentive structure within which it operates is not designed well, a gap is likely to unfold and gradually widen between the overall interests of society, and the sectarian interests of the bureaucracy itself. Again, the wisdom to grant independence to central banks, without commensurate checks and balances on their activities, is called into question.”
