The writing is already on the wall
Picture this. Ottawa 1961.
The then Governor of the Bank of Canada James Coyne is at odds with the monetary approach of the Diefenbaker government.
The situation led to the Progressive Conservative cabinet’s request for the Governor’s resignation, a demand which he blatantly refused.
The affair would become a public controversy involving opposition parties, the Canadian media and the Tory government, led by prime minister John Diefenbaker and minister of finance Donald Fleming.
However, the Progressive Conservative administration would seek to justify its efforts to force the resignation of the governor, due to his contrary economic policies and the extent to which he overstepped his position and engaged in political machinations.
Ultimately, though, the so called “Coyne Affair”, which was detailed in a 2008 study by the University of Ottawa, entitled The Value of a “Coyne”: The Diefenbaker Government and the 1961 Coyne Affair, would lead to the restructuring of the relationship between the bank and the federal government and would contribute to the eventual fall of the Diefenbaker government, Senate reform, and economic nationalism.
Talk about a classic in the annals of Central Bank-Ministry of Finance conflicts!
Which brings us to our own Dr Delisle Worrell vs Chris Sinckler legal imbroglio that has been occasioned by the sudden and seamless demise of the once untouchable Governor. His policies were once written in gold as the two jolly fellows danced from one metropole to another, with Dr Worrell not batting his eyelids twice, even if his words were deemed offensive to former International Monetary Fund (IMF) Chief Christine Lagarde or the like.
In fact, who could forget how he dissed the former French minister of finance back in 2012, when she dared to school him over the merits of devaluation, and how economic growth could be achieved.
Dr Worrell immediately went head-to-head with the IMF boss, telling her that her agency had been giving “bad advice” to countries like Barbados and, like it or lump it, devaluation was not an option for this country.
There was no censure then, even though there were many who felt that the Japan meeting was not the place for the argument on devaluation.
Yet Sinckler was mum. Even when Dr Worrell did the unthinkable at home in terms of abolishing his quarterly engagements with the media, there was nary a word of reproach from the goodly minister as he continued to defend Dr Worrell strongly.
But alas! He too would feel the bite of the Governor’s combative temperament.
On more than one occasion within the last two months, Dr Worrell has proclaimed his disaffection with the minister’s home-grown fiscal adjustment strategy, which he says is not working. The Governor has also made it publicly known that he is not the one behind the recent money-printing binge, and equally for the sake of his professional reputation, that he stood ready and willing to confront the pressing need for major expenditure cuts by Government.
Immediately, it was plain to see that like Coyne, our Governor was now a political liability.
His fall from grace would therefore be swift, even if his job has so far been saved on account of a botched execution.
Yet, it begs the question: ‘After that, what?’
Will our economy be on a sounder footing as a result? And is he the one ultimately responsible?
In examining the latter question in relation to the Coyne affair, Canadian researcher Daniel Macfarlane argued that in keeping with the Canadian parliamentary tradition, a concomitant aspect of responsible government has been ministerial responsibility, whereby ministers are responsible for the policies and actions of public officials in their department.
It was therefore concluded that the minister of finance was theoretically accountable for the Governor of the Bank of Canada, and the discord between him and the governor was thus seized upon by the opposition as an abdication of responsible government, even if, conventions surrounding the link between ministerial responsibility and responsible government had been somewhat tenuous and in flux for decades.
The then opposition further claimed that the situation had created a major constitutional crisis, and accused the government of using the governor as a scapegoat for their own failing policies. In fact, it was noted in the study that the opposition had been arguing for months that the minister of finance did need to take responsibility for the Bank of Canada’s monetary policies.
The government’s resignation request therefore created a whole new set of questions, such as how the minister of finance could claim that his policies had been at odds with the governor’s for several years after claiming the opposite in previous statements in the House.
Furthermore, how could cabinet request the governor’s resignation if they were not responsible for his actions?
Food for thought indeed!
With the writing already on the wall in terms of our own Governor’s future at the helm of the Central Bank of Barbados, all that is left to be seen is whether the Stuart administration will be able to successfully pull us back from the brink, or will they be made to suffer the same ultimate fate as the Diefenbaker government. For as former Bill Clinton campaign aide James Carville once said: “It’s the economy, stupid”.