Bessma Momani is a professor at the University of Waterloo and the Balsillie School of International Affairs, and a non-resident fellow at the Brookings Institution.
The tide of populism sweeping the Western world has not gone unnoticed, but the pressure on central bankers who view themselves as apolitical technocrats has been overlooked. The latest casualty in the surge of the “commoner” against the “liberal elite” is our very own Mark Carney. Since Canada seems like the remaining bastion of sanity against this rising populist tide, we should encourage Mr. Carney to come home and take a deserved place at Canada’s political table.
Central bankers in the Western democratic countries have fought for, gained and long cherished their independence from government capitals. Independence from governments and their cabinets, who use fiscal levers for political ends, is a principle that central bankers want to uphold at all costs.
In the past decade, the global economy has pushed Western liberal governments into austerity, stimulus spending and now economic malaise. With fewer and fewer economic levers at the disposal of governments to get the global economy chugging again, central bankers have increasingly borne the burden of trying to stimulate economic growth through its control over monetary policies. Central bankers such as Mark Carney and Raghuram Rajan are increasingly on the firing line for doing their job in the midst of populist domestic surges in Britain and India.
When Mr. Carney left the governorship of the Bank of Canada to take up his post at the Bank of England in 2013, it was a great loss for Canada and a boon for Britain, which was experiencing economic malaise in the midst of the European Union financial crisis.
The global financial system is akin to the pipes behind a Victorian home with no blueprints and yet in need of renovation and renewal. Mr. Carney is among the few in the global financial world who has the respect of his peers and a reputation of really understanding the intricate and confusing inner workings of the financial system without tearing down all the walls. Steadfast in his public service for global economic health and stability, he has contributed to fixing the architecture as chairman of the Financial Stability Board. Sadly, this type of credential gets you labelled as part of an out-of-touch liberal elite in an era of rising populism.
During last June’s referendum on Britain leaving the EU, we saw again the false narrative of pitting the “commoner” against the “globalized, liberal elite.” Mr. Carney weighed in on the Brexit debate by noting that the British economy could suffer financial risks, economic uncertainty and lower domestic and external confidence. He was aptly doing his job of assessing the economic health of Britain. Yet the Brexiters lambasted him for weighing into a domestic political debate, and his Goldman Sachs background and foreign passport were used to discredit him.
Despite the past few weeks of teeter-tottering by British Prime Minister Theresa May, who first chided him as part of the “international elite” and then embraced him, Mr. Carney has agreed to stay on until 2019 to see Britain through the Brexit two-year winding-down that starts in March, 2017. This was shorter than his original 2021 end date, signifying that the populist and political pressure against him won out.
There is no shortage of options for Mr. Carney after the Bank of England, but his rightful place is in a country and government not besieged by a populist surge – in Canada’s Liberal cabinet.
While it is doubtful that Mr. Carney would cross the pond to return to the Bank of Canada – after all, there were plenty of rumours that the former Conservative government did little to celebrate him on his way out – there may be a way to reverse this brain drain: Offer him a post in the federal cabinet.
The timing also happens to be right. We are likely headed for a federal election in 2019 and Mr. Carney could be a star candidate to help usher in another Liberal majority. Like Chrystia Freeland, who was wooed back to Canada and rose to be a formidable minister, he could be a political asset to Justin Trudeau’s “Canada is Back” strategy. So come home, Mr. Carney. Canada needs, and would celebrate, you.
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