Don’t shoot the piano player, Part 1: central bankers under fire

Alastair Winter

(Hay una versión en español de este artículo aquí.)

This is Part 1 of a four-part series by Alastair Winter. Parts 2–4 are found here:

Don’t shoot the piano player, Part 2: how did central bankers err?

Don’t shoot the piano player, Part 3: the next two years and beyond

Don’t shoot the piano player, Part 4: What about the central banks?

Alastair Winter of course writes on his own views, not those of TransEconomics or Genevieve Signoret.

Don’t shoot the piano player, Part 4: What about the central banks?

It is almost certainly irreverent to associate central bankers with saloon piano players in the Wild and Woolly West, but actually it strikes several chords!

While on his American lecture tour, Oscar Wilde apparently saw a sign that said just the sort of thing to amuse him: “Don’t shoot the piano player. He is doing the best he can.”

A hundred years later, Elton John found similar amusement in naming his recently recorded album “Don’t shoot me, I’m only the piano player”. Thus he displayed a modesty not shared with central bankers (or Oscar Wilde).

It is thought that, because piano players were often the sole providers of musical entertainment out West, the sign referred to the risk of a collapse in such entertainment. If words were bullets, then many central bankers would indeed be shot to pieces. And this raises questions as to what sort of collapse might follow their fall from grace. For now, I shall focus on the Bank of England, the European Central Bank and the Fed.

The BoE and its Governor Andrew ‘Apocalyptic’ Bailey are reportedly already targets for Liz Truss, who vows to be “on fire” (and firing) when she takes over. His predecessor, Mark Carney, was famously described as an ‘unreliable boyfriend’ on account of the BoE’s conflicting signals on interest rates.

During his term as president of the ECB, Mario Draghi enjoyed hallowed status as well as political power as he held the euro area together, leaving his successor, Christine Lagarde, the nonpareil of political operators, to face increasing internal as well as external criticism.

Understandably due to its global reach, the Fed is the ultimate “Aunt Sally”. It’s under fire from a barrage of contradictory brickbats, with some critics complaining the Fed has done too much too soon and others making the opposite charge, and a retrospective charge sheet citing years of policy errors.

This week threatens a crescendo of verbal ‘machine-gun fire’ greeting the release of a flood of Consumer and Business surveys and inflation indices from around the globe. Then will follow the publishing of the official account (not minutes) of the July ECB meeting (at which rates were hiked) and the culmination on Friday with Fed Chair Jerome Powell’s address at the Jackson Hole Symposium (central bankers’ moot).

Can it be a coincidence that none of Messrs. Powell or Bailey or Ms. Lagarde is an economist?

Figure 1

Select developed economies: Consumer price index, actual vs. 2% target since 2007