The Priesthood of Central Bankers

Central bankers have amassed unprecedented power, and yet lack serious political counterweights.

Issue: May-June 2013

Neil Irwin, The Alchemists: Three Central Bankers and a World on Fire (New York: Penguin, 2013), 400 pp., $29.95.

WORSHIPPING AND lionizing central bankers is an increasingly popular activity. This veneration holds appeal not only for investors but also for politicians and the media. Indeed, a strong codependence exists between politicians and central bankers. Without the political class, a central banker like Ben Bernanke is just a college professor. At the same time, politicians often find central bankers to be useful foils for political rhetoric around election time.

Although the growing power of central bankers since the 1970s is largely a political phenomenon, it has been scantly discussed in political discourse. Outside the grim ghettos of financial media, the issue of central-bank accountability is not a hot topic. The global bureaucracy of central bankers operates across national boundaries, exercising huge authority over both fiscal and monetary policy while avoiding explicit political responsibility. The Fed is all-powerful, for example, yet largely unaccountable.

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