[.ca] Making Money: An Insider's Perspective on Finance, ... (ISBN 0470831804)

Principle vs. Convenience:
John Crow passionately argues that the central bank of a small open economy like Canada should focus on maintaining the purchasing power of Canadian money, independent of political influence. He sees little room to be "flexible" and accommodate inflation, simply because it is sometimes seen as the grease that makes the system run smoother politically, for a while. Making Money advocates the need to run public policy by strong long-term principles, and not to succumb to situational convenience. Because of his uncompromising "stubbornness", John Crow is often painted as the Grouch that stole fiscal policy Christmas, without much debate over whether it needed stealing. Much of this book is about exercising leadership: how much should leaders lead, and how much should they follow perceived popular opinion. As it relates to the Bank, if the governmnet is not willing to take the heat for running sound monetary policy, maybe it's best to define its goals, and place it off limits, to avoid temptation by political Siren songs. The obvious issue then becomes who should interpret the mandate. John Crow critics may see Making Money as confirmation that he saw too much black and white and not enough grey. Yet, in 1987, in an inflationary environment with weak fiscal leadership, having a single minded central banker who abhorred grey had its advantages. If John Crow had not existed we would have had to invent him.