Life of a Carney

Life of a Carney
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In one of the stranger episodes of Canada’s political history — if not political history altogether — Canadians awoke Monday morning to learn that the governor of their central bank had been appointed to run England’s. Bank of Canada Governor Mark Carney will become the 120th Governor of the Bank of England, said the press release. “I am honoured to accept” said Governor Carney.

It was a truly bizarre announcement — and not just because it marks the first time in the British bank’s 318-year history that they’ve recruited a foreigner to run the show.

Mark Carney has long been one of Canada’s most high-profile political celebrities, and a man almost universally beloved by press and politicians alike. A former Goldman Sachs executive with degrees from Harvard and Oxford, he’s long been praised as a leading architect of Canada’s fiscal stability in the aftermath of the 2008 global recession, and a role model of sane monetary policy on a planet crippled by economic woe. Cautious and conservative in outlook, his management of the Bank of Canada has been notable mostly for keeping interest rates low in order to spur stimulus spending, while simultaneously dismissing the need for tougher banking regulations than the ones Canada already has. Hardly wild stuff, but that’s kind of the point.

Always a popular figure on the global stage, last November, the planet’s other leading central bankers elected Carney head of the international Financial Stability Board, one of the world’s leading institutions of the post-Recession financial order. It was an unsubtle nod to just how much of an enviable outlier Canada’s economic performance has been in the otherwise troubled west, and a major coup for a nation ordinarily unaccustomed to wielding quite so much capital — both literally and figuratively.

At the same time, however, Carney’s talents were hardly unappreciated in Canada, which is why his sudden desire to emigrate has thrown his home nation for such a loop.

Following Liberal leader Bob Rae’s resignation last June, Carney was quickly touted as a dream successor for the troubled party, and the excited chatter among pundits and party insiders remained loud even after (maybe especially after) Justin Trudeau emerged as the default nominee. Had the Governor agreed to seek the job, he would have almost certainly been the overwhelming establishment favorite, with Trudeau’s comparative youth and inexperience suddenly even more undeniable than usual. As a candidate for prime minister, he would have made Stephen Harper sweat.

Carney repeatedly dismissed his own draft movement however, once even making the offhanded (and probably unintentionally Freudian) comment that he may as well become a “circus clown.” I’ve got a job to do and I intend to finish doing it, he’d repeat over and over.

But now, evidently, that job is no longer worth finishing after all, and Carney is set to abandon his gubernatorial duties with a full two years left in his mandate. His official departure statement makes no mention of precisely why he agreed to fill the foreign post, to say nothing of why it was in Canada’s interests for him to leave at such a delicate time. One can only presume the BoE gig pays better and stimulates his big brain more, and that’s reason enough, it seems.

Uncertain times are often laboratories of political precedent, and Britain’s attempt to get their domestic finances in order by poaching another country’s head banker is certainly a novel one. Carney’s decision to actually go along with it, however, puts a bit of an edge on the whimsy.

If a distinguished public servant can abruptly decide to swap one public for another, what does that say about the patriotism of his profession? If the career path of a nation’s top bureaucrat is dictated more by what he finds personally interesting and professional challenging than what his government wants or needs, what does that say about the power of selfish motives on a supposedly selfless calling?

Governor Carney was a man as close to rock-star status as a middle-aged banker from the Northwest Territories can possibly get. Loved by his country to the point where many were demanding he run it, he nevertheless chose to abdicate all national responsibility at the very peak of his prestige in order to begin an almost non-sequitur second career on a distant foreign shore.

It was well within his rights to do so, of course, but still — it would have been nice for the guy to at least express some small twinge of nostalgia or affinity for the country that made his overseas promotion possible in the first place. Instead we got an official statement that the Governor “intends to apply for British citizenship” as soon as possible.

Carney was a role model for the world, but the world was also the ultimate destination of his loyalty, and the only place able to satiate an ambition larger than any domestic office.

He may have been a great man that came from Canada, but it seems he possessed only marginal interest in being a great Canadian.


  1. RicardoB

    "selfless calling" lost all legitimacy when higher public servant wages were instituted to attract & retain Canada's best minds.

  2. @mikehatedit

    Well, what are regulators supposed to do?

    There's an obvious problem when the people who work in the private sector are substantially more qualified than the people meant to regulate and measure their behaviour. There's also a case to be made that the challenges inherent to running a federal government (an organization larger than virtually every other body in the country) requires unusual talents unto itself.

    A government simply cannot attract sufficiently talented people if they're only willing to pay 1/10th of what an equally-qualified person could make in the private sector.

    Now, that line of reasoning cuts both ways: one solution might be reducing that disparity generally, rather than simply increasing government salaries. (CEO compensation in particular is now at what virtually all economists consider to be unreasonable levels.) But governments *do* need clever people, and you struggle to attract those people when you're unable to pay even halfway-competitive wages.

  3. Trenacker

    The problem with "selfless callings" is that they are canards. These days, "selfless calling" may just mean "young person, recently possessed of an advanced degree, with enough family money to sustain an internship of indefinite duration." In short, a dupe.

    Ask most Americans what comes to mind when they hear the words "government job," and they will conjure images of a slovenly, politically-connected underachiever whose ordinary "work day" consists of trying to find that elusive balance between lunchtime and naptime. When they aren't dreaming up nasty regulation, the only benefit of which is to gum up the gears of commerce.

    It is axiomatic in the United States that people who occupy government jobs, except at the highest levels, are the "losers" in a great race for the choicest work in the land. Private sector consulting pays more, and is generally regarded as more prestigious. Government has a great reputation for waste and incompetence that appears to be substantially connected to the collective memory (and continued experience, at least locally) of patronage politics and the general sentiment that any public money spent, is money spent badly. The irony is that the overriding ethos of public service — to do good for the citizen — is perhaps nobler than that of private enterprise — to do good for oneself or one's creditors. It is certainly possible to argue that many conceptions of "public good," and the strategies used to pursue it, are so flawed as to cause greater harm than inaction; however, few would disagree that "mere" economic efficiency and human dignity are not absolutely compatible.

    But really, what is "selfless?" Working for low or sub-standard pay, languishing without opportunities for professional development… are these essentially patriotic activities? How many federal, state, and local employees are so essential that their self-sacrifice is necessary? If I have children to raise, or a spouse to support, is it really selfless to pursue a career in which the compensation is inconsistent with the responsibility?

    I agree with mikehatedit's point that regulators ought to be as competent as the professionals whom they oversee. I also agree that public administration requires a certain set of skills.

    As for the OT, I wonder: is it that Mr. Carney is one of those oft-discussed "citizens of the world," feeling himself a peer of any sufficiently educated, sufficiently moneyed Westerner with whom he rubs elbows… or is it possible that he is urgently needed in Europe, where economic fortunes now unravelling could have dire effects on the Canadian economy? Naturally, one mightn't be prancing about crowing from the rooftops about an appointment arranged under that kind of pressure.

  4. Jake_Ackers

    Agreed. He largely "fixed" Canada. Why does he need to stay rowing a boat that is already heading in the correct direction? The UK boat is sinking, they need him. He can help Canada gain a huge influence in the world stage even if it is just with an ally.

  5. Piggy 4

    The problem with "selfless callings" is that they are canards. These days, "selfless calling" may just mean "young person, recently possessed of an advanced degree, with enough family money to sustain an internship of indefinite duration." In short, a dupe.

    Thank you for summing up the harsh realities of every internship…

  6. Jake_Ackers

    Problem with that though is that government shouldn't been in the position to require that many skilled workers. Just smells of gov't overreaching. However, you do have a point, that in the end at least some position requires skilled workers in gov't. But many do go into gov't work at the higher levels at least cause of patriotism. I think it requires a balance. Can't have people going in it for just the money too.

  7. Trenacker

    The "problem," for so-called small-government conservatives, is that government is a growth industry, both because it is believed to generate beneficiaries who become vested in its perpetuity, and because, assuming prosperity, the polity expands and the number of "wicked" problems grow in number, while the potential value-added of a government increases in roughly equal measure — especially in today's society, with civic participation at an all-time low and the increasingly self-evident truth that narrow, short-term interest often leads us off the proverbial cliff, generating the requirement, and often the demand, for both a safety net and solution provider. Because the better angels of our nature simply do not prevail most of the time. There are too many free riders, too many tragedies of the commons, too many disparities of information and wealth to yield the optimum outcome without some tinkering.

    The real proposition of conservatism ought to be that many of the solutions delivered have undesirable consequences and are therefore worth taking back to the drawing board — not to eliminate, but to perfect. Grover Norquist's talk of "drowning government in the bathtub" and his determination to literally peg federal revenue to an arbitrary, unadjusted maximum? That's the blind application of theory past the point where it serves any practical purpose except to elevate the speaker, wrongly equating purity with truth.

    As Alexander Hamilton realized at our inception, without government to manipulate tariffs — to gum up the workings of the free market — America would never have achieved industrialization. Without regulation to prevent monopoly or foul play, competition is stifled. Conservatives, I think, would do better to take the position that government should be about incentive — spending a little to get a lot. Indeed, in some respects, conservatives should be arguing that government ought to arm itself with prolific thinkers and researchers to identify better solutions in future.

    Contrary to what some Republicans have suggested, Obama didn't win because he "gave things to people." He won because so many people who voted in this past election have come to regard the Republican Party as selfish, fanatical, mean-spirited, and stingy, with little respect for people who have not already made it, and a refusal to look at struggling folks as anything but "takers." Worse, the Republican Party has come to be seen not merely as the party "for" old white people, but as the party that has agreed to house this country's racists. Republicans may insist that it is untrue, but the image is for them to change.

    The problems in the United States today now include the matter of distribution. It's a word very often bundled up with the concepts of Socialism and Communism. We, as Americans, feel uncomfortable talking about "should" have wealth, and who "shouldn't." We worry that we are making a moral judgment, or starting down the road paved with good intentions, leading to ruin. But it bears asking: in a village with 500 units of wealth and 100 people, each with some industry, is it better that each person have 5 units of wealth, or that 1 person have all 500? Just as we have thoroughly rejected the concept that wealth is best when stagnant — that is, that everyone should have 5 units of wealth for the sake of equality — we should also strive to prevent situations in which wealth is generated primarily by those at the very top. Republicans tend to take it on faith that people spend the money they earn — that the very wealthy act as "job creators" by making investments. But while I'm willing to believe that large companies beget and sustain small ones, I've yet to see evidence that job creators who achieve wealth beyond certain thresholds spend that money more readily than poor people who must either buy necessities or receive them.

    Also, Jake, what positions in government require no skill? I'd also challenge your assumption that patriotism motivates primarily those people in the highest positions. In fact, I think a strong case can be made that egotism, not just patriotism, is at play once one gets to the very top.

  8. RicardoB

    Hahaha, my statement was meant to emphasize how anachronistic "selfless calling" was for modern governments. I think people like Carney absolutely deserve top dollar and are completely justified pursuing top dollar for their skills internationally.

    Of course, it'll result in some countries being run like national-scale cancer research fundraisers and others like local community centers. Which is fine.

  9. SES

    Maybe it's the new fad for British publicly-owned companies. The Royal Mail also poached the CEO of Canada Post in 2010.

  10. Dan

    Will Mark Carney become a British citizen? Running the nationalized bank would seem to require that.

  11. Jake_Ackers

    He is Canadian, part of the Commonwealth.

  12. Dan

    And part of the United Nations, and part of the Organization of American States, but none of those make Mark Carney anything resembling a British citizen.

  13. Jake_Ackers

    My point is that the British gov't probably views him as practically British already since Canada is part of the Commonwealth. British Nationality Act of 1981 IIRC gives Commonwealth citizens the same rights and privileges at British ones. Thus if Carney wanted to become an MP and become PM he could as well. So Head of the bank is not a problem.

  14. Hentgen

    Taking the Bank of England post puts Carney in the world's financial capital and on the fast track to a seat in the House of Lords. It's a strange thing to covet, but some do.

  15. Etc.

    London isn't the world's financial capital.

  16. Jake_Ackers

    Actually it is debatable. London and NYC are always in the top 2. They frequently change between 1 and 2.

  17. Kyle

    Honestly, with household debt being what it is, he may be getting out before a Canadian-made credit crunch can be blamed on him.

  18. William

    Its also conceivable that he is trying to set himself up for the IMF Director job someday. While the European hegemony there is weaker than it has been in the past, he probably stills stands a much better chance if he could get the support of the UK.

  19. Guest

    I was thinking the same. In electoral politics, some degree of patriotism is a sine qua non, but in the politics of business, having any master but your present employer, whether it is your community, your religion or your political convictions, makes you a liability.

    So if someone like Carney is thought to have political aspirations, it's a good career move in the long run to do something that rules that out. Speculation about a political bid would harm his credibility as a central banker in the short term too, so he can argue he's protecting his current employer from difficult questions.

    Also, it's an opportunity for Harper to gloat that Britain needs Canadian expertise to fix its problems.

    Personally, I hope Carney tells Osborne to get his act together because the man is utterly clueless and survives mostly because so many of his colleagues are also hapless bletherers.

  20. beanz

    I like this development. It's nice to see that the world's best minds needn't be constrained by narrow national interests. People with world-level talent should be able to apply their talents globally.

  21. Sven

    As an American, I can barely imagine what would happen if we appointed a foreigner, even from a close ally like Canada or Britain, to a high government post. The xenophobes would completely flip out, there could be Congressional hearings, scandal, controversy, wall-to-wall media coverage… a great big mess.

    I wonder what the reaction is from the rest of the British banking establishment? Mr. Carney most certainly seems qualified for the position, but do Britons see it that way?

  22. Jake_Ackers

    We actually a lot of foreign born politicians in the US. Kissinger and Albright being two notable ones. Although none have been appointed directly like Mark Carney. And frankly, appointing a Canadian to a position in Britain is not that big of a deal. Canada is after all part of the Commonwealth.

    And I don't think it would be xenophobia. A lot of fans from rival sports teams don't like players from those teams. Why? Because the person subconsciously might not be as loyal or have that extra drive for the team. It would depend on the position to be honest. Now a Sec of State or Defense from another country? Yah I wouldn't want that either unless they grew up here or have been here for years much like Kissinger.

    But if its some close ally for some position that isn't so close to a trigger? Sure. If we really need it. But I don't see a major position that we would need to do what Britain did. Maybe some lesser high profile one.

  23. Dan

    Kissinger and Albright came to the United States as children and became citizens, then took their government posts. They share almost no similarities with this current situation.

  24. Jake_Ackers

    Yes and I pointed that out in my post. I was saying that it has been done in some form but not a direct foreigner. So there isn't straight up xenophobia. If we were xenophobia we wouldn't of accepted many of our politicians as we do today.

    Sven was mentioning xenophobia on a direct appoint. Which leads to my next point. I don't think it would be xenophobia for not wanting a direct appoint to be a foreigner. It's about national security when it comes to a position like Sec of State or Defense. Some minor positions are not that big of a deal. Moreover, Carney isn't a direct foreigner either. He is Canadian thus a commonwealth citizen thus the same rights and privileges as a British citizen under the law.

    Carney situation seems akin to more like a US Virgin Islander or a Puerto Rican or even person from the US Pacific Islands serving in a high American post. The British just view Canada as British territory, which technically it is under Commonwealth status.

  25. J.J. McCullough

    I get the impression that a lot of the British establishment still harbours imperial fantasies about countries like Canada. Apparently Prime Minister Cameron got a standing ovation in the House of Commons simply for mentioning that Governor Carney is a "subject of Her Majesty."

  26. Jake_Ackers

    Yah that was my point. Canadians view this as anti-patriotic but British see this as loyalty to the crown.

  27. Guest

    There's a kernel of truth to what you're saying, and Carney himself seems to have support from both sides of the House as well, but beware of viewing Tory MPs as representative in the least, even of the British establishment – they can be a bit of a self-caricature. One got caught claiming expenses for getting someone to clear his moat.

    The establishment could be broken down into a) gung-ho nationalists, most of whom are either imperialists who don't care so long as he's a commonwealth citizen anyway or racists who don't care so long as he's white; b) people who aren't gung-ho nationalists, who don't care that he's Canadian so long as he's competent; c) the secret services, who, since Carney has got this far, will have already ok'd his appointment, and don't care so long as he's not being paid by the Chinese.

  28. Jake_Ackers

    Reading JJ's article, "If a distinguished public servant can abruptly decide to swap one public for another, what does that say about the patriotism of his profession?"

    Sounds like Huntsman. Although you can make an argument he served where his country needed him. If he won the primary though, he would of simply been saying, "Oh thanks Mr. President for the job, but now I want yours."

    Christie denied running for VP and Prez. Although TBH he probably did it because he taught he couldn't win. But then again an argument would of been made the US needed him more than NJ. To be frank, it all depends.

    Carney did his job with the Bank of Canada. Why stay more? Just to warm the seat? If the boat is headed in the right direction why waste energy rowing? Let someone else row for a bit because he needs to save another boat from sinking, seems to be his method. To be quite honest, I thought many would welcome this. Okay the timing looks bad but isn't this good for Canada? The influence that Canada is potentially gaining in the international stage with this is amazing.

    Canada soon won't be in Top 8 in the world by economic size thus it needs to expand elsewhere. This isn't the best method but it might be a way. I was just look the other day at the pass Heads of the UN and none have been North American. Surely, a Canadian would be welcomed a lot easier than an American. It would be great if a Canada could. Canada has a huge and important role to play internationally. Our ally that can fly under the global political radar.

  29. Guest

    Whether it is Governor of the Reserve Bank of Australia, Canada or Britain I would think that you should always try to appoint the best person for the job – regardless of where they happen to live.
    I am surprised that this is controversial.

  30. M_T_Cicero

    Three general thoughts:
    1) I tend to like the idea that this was a case of "fix the problems wherever you can". In his case, with Canada in good order, going to another country in the west was probably the best thing he could do. Not necessarily a selfless act, but perhaps of what one might call "enlightened self interest" (and I'd point out that if he was really chasing money, he could probably have made far more in the private sector).
    2) He switched countries. So what? How is this different from a CEO being hired away by a foreign company? I don't see anything wrong with the UK hiring him and I don't see anything wrong with him taking the job. There are many and complicated reasons for me expressing this, but I just can't get worked up over what I'll shorthandedly call nationalistic bits like this.
    3) It's worth asking, as a counterpoint to yours, JJ: Why shouldn't a pool of countries agree to share public servants to help with one another's problems? At least as a rhetorical question, why shouldn't the Anglosphere (at the very least, since you avoid language jam-ups) collectively agree to be willing to shuttle around higher-tier public servants? That would give everyone access to the collective talent of a number of major countries, allow talent that gets bottled up in some of the minor ones to move around and be put to good use, etc.

    Finally, on the bit about political ambitions, he probably just isn't a politician and didn't want to play that game more than he had to.

  31. ThePsudo

    Re: 3) Are you saying you'd be okay with a former Federal Reserve chairman running Canada's central bank? You'd have no concerns about Canadian banking being run with the intent of furthering American interests at Canadians' expense?

  32. M_T_Cicero

    Well, I'm American, but let me spin that around: I'd have no problem (at least conceptually; we won't get into the details of their policies one way or another here) with Mervyn King or Mark Carney being hired to run the Fed. But with your question, I would have no issue with a Fed chairman going to Canada (or the UK) either.

    I suspect part of my reasoning is that you've got a lot of the same actors in all of these countries (HSBC is in the UK, Canada, and the US; Barclays is in the US and UK…and so on). But talent is also talent, and in general other than a modest hawk/dove split on inflation, it's a /very/ technocratic field.

  33. Victor

    People do tend to ignore long-term causes over immediate effects. Perhaps Carney is bailing before factors like home-prices and super-inflating household debt come to a head and cause a Canadian credit-crunch? It's almost inevitable that in spite of the years such things take to rise to crisis levels, he'd still be blamed. Just like he was praised for keeping an already well-regulated system conservative and regulated.

    Alternatively, perhaps he was tired of being praised for maintaining stability in a banking system renown for averting stupid risks, and wants to take a crack at fixing something that really is broken?