The central bankers of the World met at Jackson Hole, Wyoming last week for their annual gathering far from the madding crowd. And as far away from the mess they have helped to create as you could imagine. Out of sight out of mind I guess. The ECB boss felt it his purpose at the gathering, which you can guarantee is plush in all respects (catering, wines, etc), to urge politicians to introduce more “growth-friendly policies”. He claimed in his speech – Unemployment in the euro area – that the so-called “sovereign debt crisis” had disabled “in part the tools of macroeconomic stabilisation”. Which is only true if one accepts that a central bank should play no role in supporting fiscal policy and that fiscal policy should be constrained by innane rules that deliberately prevent it from having sufficient latitude to meet foreseeable crises. Which is about as inane as one could get. But then none of these central bankers are accountable for anything much. They can swan around to meetings and issue ridiculous statements about growth-friendly policies, while supporting austerity, and nothing much happens to them personally.

I plan to send my final manuscript for my Eurozone book to the publishers tonight. I have some final checks to make on the 390 pages. I hope it will be published in both English and Italian later in the year. Obviously I will promote it here once it is ready. The book contends that the Eurozone is structurally biased towards stagnation because of the neo-liberal rules that constrain national governments from dealing with large spending collapses with appropriately scaled fiscal responses. The crisis in now into its 6th year and there is little sign that the stagnation is over. Indeed, the latest data would suggest that some of its largest economies are going backwards still. Italy has just announced it is back in recession and factory orders to Germany have plunged. I have been saying it for years but repetition is no sin – they should dismantle the currency union in an orderly manner and allow the national governments to return to growth in their own way. The nations are incapable of doing that collectively given the neo-liberal Groupthink that has them in a vice. So, a rogue nation is needed to break out of the straitjacket and provide a blueprint for the others. Italy should be that nation. In many ways it has panache and flair – it is time to show it in this specific way.

One of the major demands that the Germans made on its partners leading into Maastricht in 1991 was the need for a politically independent central bank that was focused on price stability alone. This was claimed to be essential because it would stop politicians imposing so-called short-termism onto monetary policy (read: caring about people who might be unemployed or otherwise in need of fiscal assistance), which would compromise the inflation fighting process. These unaccountable, unelected central bank boards were then free to do what they wanted and demonstrated a willingness to use unemployment as a policy tool rather than a policy target to ensure economies were as close to deflating as possible, irrespective of what that meant for economic and employment growth. It is, of-course a farce to think that a central bank can be independent anyway either in a political sense or an economic sense. But the neo-liberal hype about independence was to ensure governments could absolve themselves of the public ignominy of rising unemployment and the political costs that went with that, and, instead, blame the central bankers. The bankers had no political constituency to manage or groom and could hide behind the ever-present paranoia about hyperinflation to ‘justify’ their policy approach. But the central bankers are ‘independent’ only when it suits them. Or should we say ‘independence’ is a one-way street. If the politicians dare to comment on monetary policies there is a hue and cry. But central bankers feel they can provide advice to the democratically elected governments whenever they choose and the media hardly blinks. Hypocrisy has no bounds.

Seventy years ago today there was a major mobilisation – D Day – designed to free Europe from the German military (and ideological) oppression. The allied troops stormed the beaches at Normandy as part of the so-called ‘Operation Overlord’, which quickly liberated France and set up the campaign that would end Germany’s dominance. Unfortunately, modern day Europe is caught up in a different form of German ideological oppression and the economic consequences have been devastating. The European Central Bank showed yesterday how stifling this oppression is when they made what were considered ‘historic’ changes to policy, which any reasonable assessment would conclude will do very little to stimulate growth. The policy mentality is in denial of history and economic logic. But with fiscal policy bolted down by the neo-liberal ideology there is no room to grow. Another major invasion of Europe is needed – an intellectual storming of the beaches. That is the only way the euro-zone nations will liberate themselves from the current malaise.