I was surprised to be told, by the editor of this magazine, that next week will mark the 20th anniversary of my standing down as Chancellor. The anniversary had entirely passed me by. I was asked this week why, if the economy was turning, George Osborne didn’t announce that he had spotted ‘green shoots’, as I observed in 1991. Although my remark, much rubbished at the time, turned out to be surprisingly prescient, I think Osborne is right to be cautious. Economic statistics are revised so often, trying to steer the economy as Chancellor is, as Harold Macmillan observed, like trying to catch a train using last year’s timetable. The best comment on green shoots was that of my then wife: ‘You don’t get green shoots in the autumn.’ I was surprised how the phrase went global: ‘pousses vertes’ in France, ‘germogli verdi’ in Italy and ‘grüne triebe’ in Germany. I even saw a ‘Café Green Shoots’ in Amsterdam. But that was different. It was a marijuana café.
Politics is interesting wherever it happens. One of my interests in recent years has been Iranian politics. Yes, they do have politics in Iran and they are squaring up for another presidential election on 14 June. Iranian elections have been accurately described as ‘unfair, undemocratic and unpredictable’. But they are fiercely competitive, at least between candidates approved by the Guardian Council: over 600 people put their names forward to be candidates, now whittled down to eight. Great excitement was caused by the last-minute attempted entry into the race by two enemies of the hardline conservatives: Akbar Hashemi Rafsanjani, the former president, and Esfandiar Mashaei, right-hand man of Ahmadinejad but with apparently more liberal views. Both have now been disqualified from standing, but there are other interesting candidates, such as the Glasgow-educated Mullah Hassan Rohani, a past nuclear negotiator, and Mohammed Qalibaf, the well-regarded Mayor of Tehran. Both have expressed their keenness to improve relations with the West. In Iran the unexpected often happens and this election is still worth following.
Now that Mervyn King has given his last press conference and spotted some green shoots of his own, attention is turning to his successor, Mark Carney. He is being portrayed as the man on the white horse riding to our rescue. He has been very successful in Canada and I wish him well. But I do hope he is well prepared for the English press. Reports suggest that the Chancellor will urge the new governor to increase ‘quantitative easing’ (QE), the printing of money or the buying up of the government’s own debt in order to speed up the recovery. I hope the new governor will exert his independence and be cautious about that. At the beginning of the financial crisis, QE in the US, Japan and here was necessary as money supply plunged to levels not seen since the 1930s. But each successive round of QE seems less effective and the main effects are on stock markets, bond prices and house prices. It has also produced a race to the bottom by devaluing countries. QE forces investors, including banks, away from safe assets and into riskier ones. Real improvements in the economy should come from productivity increases and not ever-increasing asset prices. Some day this bubble will meet a pin. I just hope that in clearing up the mess of the last disaster, the central banks of the world are not sowing the seeds of the next.
Last week I went to a wonderfully glamorous party of which Gatsby would have been proud. It was given by Rocco Forte and his sister Olga Polizzi to celebrate the 175th anniversary of Brown’s Hotel, the oldest hotel in London and a great place for a power breakfast. It was founded by Lord Byron’s butler and his wife, Lady Byron’s maid. Rocco bought Brown’s back from the group that took over his father’s empire. He and Olga refurbished it and Mrs Thatcher reopened it. It sits alongside other jewels like the Lowry in Manchester, the Astoria in St Petersburg and the De Russie in Rome. The British economy would benefit from more strong, family-owned businesses that can ignore short-term shareholder pressure and concentrate on excellence. The Forte Group is a perfect example.
They say that one swallow does not make a summer but this year I haven’t seen a single swallow. One can observe the migration of birds in the parks of central London. Normally, I see the first swifts arrive over the round pond in Kensington Gardens in the last week of March and the first swallows at the end of April. But this year, not a single sighting of either. I am beginning to wonder whether any swallows will arrive when a friend in Suffolk emails me a photograph of swallows sitting on some telegraph wires. So now I have undoubted photographic evidence that there is summer, at least in Suffolk.
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