When was the last time anyone really cared about a meeting of the Group of Eight or 20 or however many? Except for the entertainment, who would care about a UN session? While the rich might be uplifted at a philanthropy session at Davos in order to find out what’s really going on, they head to the Central Bankers’ panel.
In fact, it’s the Federal Reserve Chairman, the European Central Bank President and the Governor of the Bank of England who make more important decisions than team Obama, Cameron and Merkel.
Toss in a few more players depending on the issue and meeting – the U.S. Treasury Secretary; head of the New York Fed; finance ministers in Germany, France, England and other capitals; head of the IMF; German Bundesbank; and the Bank of Japan – and the key players in the Western financial alliance are assembled.
Central Bankers didn’t just decide and implement the key financial decisions of the last decade, even today the essential investment decisions of institutions and individuals are determined by judgment calls on when the Fed will change its stimulus and interest rate policies (Don’t fight the Fed) or the effectiveness and stamina of the ECB. No one has any real hope for an intelligent fiscal policy from gridlocked and easily distracted Washington or from the volatile politics of southern Europe.
Politicians don’t talk about it and the public is still not totally aware of it, but the Central Bankers and other key financial players in the world capitals are largely making decisions of austerity and growth, stimulus and investment, and the politicians are primarily tasked with backing them up.