Why Have Politicians Abandoned Economic and Financial Policies to Non-Elected Bankers?

By Rodrigue Tremblay

Since 1999, non-elected bankers have been in charge of economic policy in the US and other countries, with questionable results. Are we on the verge of a new financial crisis?

“There is the possibility… that, after the rate of interest has fallen to a certain level, liquidity-preference may become virtually absolute in the sense that almost everyone prefers cash to holding a debt which yields so low a rate of interest. In this event the monetary authority would have lost effective control over the rate of interest.”

John Maynard Keynes (1883-1946), The General Theory of Employment, Interest and Money (1936).

“For my own part, I did not see and did not appreciate what the risks were with securitisation, the credit ratings agencies, the shadow banking system, the S.I.V.s (Structured Investment Vehicles).

– I didn’t see any of that coming until it happened.”

Janet Yellen (1948 – ), 2010, first female Chairman of the Federal Reserve, the US central bank, since Feb. 1, 2014, Vice Chair from 2010 to 2014, and a member of the FED since 2004, (in a testimony to a congressional committee, Nov. 15, 2010). [N.B.: From 2004 to 2010, Ms. Yellen was president and chief executive officer of the Federal Reserve Bank of San Francisco, which oversaw the US’s largest mortgage lender, Countrywide Financial. Bank of America acquired Countrywide in 2008.]

The beauty of the Glass-Steagall act, after all, was its simplicity: banks should not gamble with government insured money. Even a six-year-old can understand that…”

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About the Author

tremblay-webDr. Rodrigue Tremblay is a graduate of Stanford University where he obtained an M.A. in Economics (1965) and a Ph.D. in Economics (1968). He is a former chairman of the Department of Economics at the University of Montreal. He is also a former president of the North American Economics and Finance Association, a former president of the Canadian Economics Society and a former vice-president of the International Association of French-speaking economists. Dr. Tremblay served as Minister of Industry and Trade in the Government of Quebec, from 1976 to 1979. He has also served as a member of the Committee of Dispute Settlements of the North American Free Trade Agreement (NAFTA).

Dr. Tremblay has published 30 books. His most recent book is “Le Code pour une éthique globale”, Les Éditions Liber (French, 2009) and “The Code for Global Ethics” Prometheus Books (English, 2010). In 2004, Dr. Tremblay was awarded the prestigious Condorcet Prize as Humanist of the Year.



1. The Glass-Steagall Legislation. https://en.wikipedia.org/wiki/Glass–Steagall_Legislation
2. The Liquidity Trap. https://en.wikipedia.org/wiki/Liquidity_trap
3. The monetary base. https://en.wikipedia.org/wiki/Monetary_base
4. The money supply. https://en.wikipedia.org/wiki/Money_supply
5. Real interest rates. http://www.investopedia.com/terms/r/realinterestrate.asp
6. Deflation https://en.wikipedia.org/wiki/Deflation
7. Excess reserves. http://www.investopedia.com/terms/e/excess_reserves.asp
8. The yield curve. http://www.investopedia.com/terms/y/yieldcurve.asp
9. The Yield Curve as an indicator of recessions. https://www.newyorkfed.org/research/current_issues/ci2-7.html
10. Stock market bubbles. http://www.investopedia.com/articles/06/interestaffectsmarket.asp
11. The demand for loans. http://www.cnbc.com/2016/
12. The 2007-08 financial crisis. http://www.investopedia.com/articles/economics/09/financial-crisis-review.asp
13. Economic and financial globalization http://www.globalresearch.ca/pitfalls-of-economic-
14. Excess of production capacity. http://www.investopedia.com/terms/e/excesscapacity.asp
15. The expected return on capital. http://www.investopedia.com/terms/e/excesscapacity.asp
16. Consumer debt at a record high. http://www.moneytalksnews.com/consumer-debt-hits-record-high-and-thats-good-thing/
17. Baby-boomer retirees suffer from low interest rates. http://money.usnews.com/money/blogs/on-
18. Self-fulfilling prophesy. http://www.businessdictionary.com/definition/self-fulfilling-prophecy.html
19. Quantitative easing. http://www.investopedia.com/terms/q/quantitative-easing.asp
20. “Save Banks and Kill the Economy.“ http://www.thenewamericanempire.com/tremblay=1129.htm
21. The total world financial debt.http://www.iii.co.uk/
22. “Economic Bubbles and Financial Crises, Past and Present.“ http://www.globalresearch.ca/economic-bubbles-and-financial-crises-past-and-present/18202
23. “The risks from negative interest rates.“ http://money.cnn.com/2016/03/07/news/economy/negative-rates-central-banks-bis-report/
24. “The Effects of a Month of Negative Rates in Japan.“ http://www.bloomberg.com/news/articles/2016-
25. The Negative Interest Rate Policy (NIRP) http://www.investopedia.com/terms/n/negative-interest-rate-policy-nirp.asp
26. “Debt Deflation: A Long Economic Winter Ahead.“ http://www.globalresearch.ca/debt-deflation
27. “ECB pulls out all the stops, cuts rates and expands QE“ http://www.cnbc.com/2016/03/10/will-super-mario-deliver-high-hopes-for-robust-ecb-easing.html
28. Disintermediation. http://www.businessdictionary.com/
29. Financial répression. http://lexicon.ft.com/Term?term=financial-repression
30. “Osborne Looks to Carney to Do the Heavy Economic Lifting.“ http://www.bloomberg.com/news/articles/2016-03-14/osborne-looks-to-carney



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