Long ago, economist John Kenneth Galbraith warned that you couldn’t survive a career in commercial banking and be a human being too. Hopefully, he’d modify that charge today.
He might agree at least that Mark Carney, a former investment banker and now Governor of the Bank of Canada, is a first-rate human being.
That said, it‘s not likely that liberal economist Galbraith would endorse this Liberal campaign idea: turning Canada’s highly respected Bank Governor into a winning candidate for the Liberal Party’s leadership.
Liberal partisans in Canada have enjoyed a long, rewarding relationship with the commanding heights of Canada’s public sector. The political savvy you have to possess to be effective at the top of Canadian public service easily makes you a fellow traveller in the eyes of Liberal Party talent scouts. Indeed, senior public servants have been recruited as Liberal Prime Ministers and Cabinet Ministers.
Conflict of interest concerns matter, of course, if a Deputy Minister or a Bank Governor is cavorting with profit-making industries and commercial lobbyists. Public servants are unquestionably human; thinking about a future career in commercial banking might affect how you guard the public interest today. That’s why there are clear post-employment guidelines about where, what and when a senior public servant can go next.
Independence and integrity are even more important qualities for central bankers.
Being taken at one’s word is literally the working capital of a central banker. Today, he or she is the closest thing a national currency has to the gold standard. One reason gold is precious is that it has no political judgment or agenda. So, a modern central banker’s fragile assignment is always to be less human than his political masters.
Last summer’s Liberal recruiters didn’t see the point. Beating Stephen Harper with a less human Stephen Harper was hardly their plan.
Writing in MacLean’s, Stephen Gordon explains why important monetary policy decisions—raising and lower interest rates, for instance—need to be seen to be far removed from political considerations and, consequently, is unforgiving about the failed attempt to Carney into a politician:
“If we are extremely lucky, this episode will be quickly forgotten. But if by taking a run at Mark Carney, these Liberals have initiated a never-ending cycle of speculation about the possible political ambitions of future Governors of the Bank of Canada, they will have weakened — perhaps fatally — the foundations of Canadian monetary policy.”
Gordon’s point of view doesn’t seem to have legs amongst most political observers. It’s not cool in Ottawa to be harsh about nice people. Furthermore, good monetary policy today promotes growth and, therefore, is popular anyway.
But, Mark Carney’s popularity is circumstantial and not part of his job description. Inviting Carney to husband or cash in that popularity for a career in partisan politics was pure mischief.
Liberals should better understand the imperatives of institutions that they’d like to lead once again. Mark Carney only needs to be faster at telling flatterers to get lost.