The most efficient way to change the economic game—by FAR—is reform at the central banks. We are literally destroying lives AND the planet because we live in societies that select for one of its most important occupations—central banker—people who are profoundly ignorant about how the real economy works, devoted to crazy religious ideas with the fervor of monks, and more arrogant than the Pope's red Prada loafers.
Now IF we can replace the ignorant-devoted-arrogant crowd with folks who understand the problems of nation-building, the rest of us can go back to work and leading our lives. I mean, we COULD have a revolution or some other civic upheaval but if that revolution doesn't lead to more enlightened monetary policies, it's pretty much a waste of time. So why not just jump ahead to a better central banker? And since most of the folks employed by central banks are good sycophants anyway, a change in leadership at such institutions actually makes a big difference.
Getting a new central banker with a different worldview is what Abe intends to do in Japan. I predict this move will be wildly successful. There is AMPLE evidence to support this view. It's good to bet on plans that are supported by both theory and a track record. I drive a 17 year old Lexus that is still nearly perfect so I get a regular demonstration of what the Japanese believe to be possible. This is a nation of Lexus-builders—they DESERVE a central banker who understands this.
And it looks like they may be getting one.
New Leader Is Expected for Bank of JapanBy HIROKO TABUCHI February 25, 2013
TOKYO — A financial policy expert and harsh critic of the Bank of Japan’s efforts to combat deflation is set to be the government’s choice to take over the nation’s central bank.
The official, Haruhiko Kuroda, a veteran of global financial circles and current head of the Asian Development Bank, will be nominated as the bank’s governor to take over next month, according to a ruling party lawmaker with knowledge of those plans.
Prime Minister Shinzo Abe has instructed ruling party officials to start negotiating with opposition parties to clear the way for Mr. Kuroda’s appointment, which must be approved by a divided parliament, the lawmaker said.
“This is a critical time for Japan’s economy, and we must avoid, at all costs, a failure to gain parliamentary approval for this appointment,” NHK, the public broadcaster, quoted Mr. Abe as telling ruling party executives Monday morning.
With Mr. Kuroda at its helm, the bank could take much bolder steps to kick-start economic growth. Mr. Kuroda has publicly criticized the Bank of Japan for not going far enough to fight deflation, and has urged the bank to adopt inflation targets and to expand an asset-buying program to pump more cash into the Japanese economy.
Mr. Kuroda’s global experience — as vice minister for international affairs at Japan’s powerful Finance Ministry from 1999 to 2003, and as president of the Manila-based Asian Development Bank starting in 2005 — could also help Tokyo navigate foreign criticism that its monetary policies are intended to weaken the yen to give Japanese exporters a competitive edge.
The yen has weakened by over 10 percent in the last three months as Mr. Abe laid out his monetary agenda, pushing the outgoing central bank governor, Masaaki Shirakawa, to start taking a more aggressive monetary stance. But Mr. Abe had indicated that a change at the bank’s top ranks was needed to break with the bank’s cautious past. On Monday, the yen fell to a 33-month low.
Kikuo Iwata, a professor at Gakushuin University in Tokyo and another vocal critic of the central bank, is set to be tapped for one of its two deputy governor spots, according to the lawmaker. Mr. Iwata is the author of several books, including “Stop Deflation, Now” and “Is the Bank of Japan Really Trustworthy?”
Mr. Kuroda beat out a fellow former senior Finance Ministry official, Toshiro Muto, who had strong backing among both bureaucrats and local politicians but lacks the top-level global contacts. Mr. Muto was also viewed as being more cautious than Mr. Kuroda on monetary policy. more