Friday, July 13, 2012 is just about 2 weeks away.
The Economist Magazine reports, in a Tweet to me, that central bankers can do more in the face of incompetent politicians to support weak economies, the faces of an upset former professor of monetary economics at Princeton, Ben Bernanke, and bleary-eyed Mario Draghi, formerly of Goldman Sachs, adorning the beginning of the article. The academic and the practitioner are running two of the world’s most powerful central banks – Federal Reserve and European Central Bank.
Holding bankers to kings and the Church, separated from the affairs of the state, accountable by the state for their wealth caused by the state should not be new to Mario Draghi in Frankfurt.
Central bank independence, as a matter of law, goes back about 1300 years to the Doge of Venice when the Christian kings of Europe (beginning with the Franks) and the papacy in the Vatican (and later briefly in Avignon, France) had built armies (The Poor Fellow-Soldiers of Christ and of the Temple of Solomon, commonly known as the Knights Templar) and legions of physicians (Knights Hospitaller) as protectors of pilgrims visiting the Christian Holy Lands of Israel.
The Knights Templar, wealthy because of the crusades, were charged with heresy, sodomy and blasphemy and arrested on Friday, October 13, 1307 by King Philip IV of France who, together with the royal bloodlines of Britain and France, was indebted to the Templars. Financial obligations of the royals to the Templars went unpaid and their assets were confiscated by the state and the Church after they were put to death by King Philip IV and Pope Clement V.
Central bankers, granted autonomy by law of the state, to benefit the economy can indeed do more, unless only the state wants to be responsible for the economy as it has been since the publication of Adam Smith’s Wealth of Nations in 1776 and the American and French Revolutions overturning monarchies, orchestrated by the descendants of the persecuted Templars, in 1776 and 1789.
Independent central banks are a relic of the past of the kings and the knights, not a figment of democracies.