“Once upon a time a man journeyed from Jerusalem to Jericho and fell into the hands of robbers. They shook him and badly wounded him and left him half dead. Coincidentally, a priest passed that road; he saw him and he passed. And Levi also crossed. The beetles are on the other side of the road to see if biodiversity has not been affected.
That’s how bad it is with De Nederlandsche Bank (DNB). An annual report in which we search in vain for any concern about poverty, inequality or “minimalism” in the Netherlands. Where the DNB does not say is that hundreds of thousands of seniors do not have enough because the DNB has prevented any correction to their pensions since 2008.
But where the annual report details that President Klaas Knott has formed a “new biodiversity team” out of the nearly 3,000 employees he now has. They are working hard to develop “biodiversity footprints” to detect whether dying plant species or wasting insects may be putting Dutch banks and pension funds at risk.
Another hundred additional employees
In Knot’s annual report, which should mention how the DNB performed its legal responsibility for inflation, banks and pension funds, these tasks receive little attention. Disproportionately, one in five thematic pages addresses sustainability, environment and climate. More and more three thousand highly paid detectives are looking in every imaginable and unimaginable direction at your expense and mine for potential banking risks, but so far they have found nothing of interest.
DNB is growing with hundreds of additional employees every year, so there may be something to report next year. Meanwhile, in the 58 pages of the DNB annual report, the words “poverty” and “bottom” are nowhere to be found, two references to “income,” but not to low income, only when comparing house prices and rents. In the free sector, the “AOW” is limited to an exhibition of fringe benefits for DNB employees.
I understand that in a country like Australia with a lot of surface mining, there are concerns about environmental damage, but even then it seems logical to regulate environmental damage from the responsible ministry more stringently than addressing the banking system. Mining is international, and if Australian banks are restricted in their lending to mining by the Reserve Bank of Australia, a Chinese bank will take over.
All respect to the protectors of nature. Last Sunday was “Biodiversity Day” and that is why our pastor preached about the psalms that sing about the nature of God:
‘How much are your works, O Lord?’
You have made everything with wisdom
The earth is filled with your creatures
See how the sea extends
There abounds without a number,
From small and large animals
The pastor has done what he does best, which is to exhort us to manage creation with care and gratitude (starting at 40:00, a sermon that no one else can do).
Barbs for DNB
On the other hand, DNB spends huge amounts of money on a topic in which it does not have much experience. Stuart Kirk, senior managing director at responsible investment bank HSBC, discussed the data from many central banks and was nowhere more ruthlessly negative than about the DNB: false assumptions, false calculations, and baseless foolish findings (see from 11:25 for a critique of Kirk in Three Slides of DNB Carbon Dioxide Research). ‘Particularly disturbing’ Kirk calls DNB’s econometric bullshit as a downside risk to banks from CO2 (see links to Cochrane and Kirk for comments on Knot and colleagues’ egos).
The DNB has positioned itself as the country’s savior for climate problems, and now also for biodiversity, but what could be more beneficial for nature protection: 100 additional scholarships at Wageningen University for biologists from developing countries or 100 additional DNB employees (with €80,000 per employee, One of the most expensive employers in the Netherlands)?
Meanwhile, the DNB neglects to study inflation. Klaas Knot writes in his preface: “The longer high inflation persists, the greater the risk that this higher level will be anchored in inflation expectations and thus in the behavior of households and firms.” Knot leaves it in that great statement, though he should know that “desperate” is the best word for hundreds of thousands of families who can no longer deal with rising energy prices.
A little further, he wrote: “It is important to closely monitor further inflation developments and the dynamics of inflation expectations, in order to react in a timely manner with monetary policy if necessary.” Not a word about those other policies that can help people too. Less tax on gasoline? Want to save less on your energy bill? pension correction? The acceleration of the state pension increase? Not a word about the pros and cons of such measures having a direct impact on inflation and incomes, but instead:
“There is a growing trend in which the negative impact of shocks on individuals is considered to be offset by the government…. Previous experiences, particularly the 1970s, show that … excessive government intervention can actually derail economic dynamics and prosperity.
Let’s think knot in two feet in his
Knot would be right if he thought of the marginal tax rate of 80 to 86 percent for single people with children and gross annual incomes of between 26 thousand and 40 thousand euros as an example of skewed dynamics. This inhuman rate is due to the simultaneous reduction of AK, IALK, NVZK, ZT, KGB, HT, KOT and KOKO as soon as people start working more hours – that is why they prefer not to work those extra hours, because you have become the thief of your own wallet. Just ask at Schiphol or at the hospital.
But I fear that Knot, in his context of inflation, cautions here against helping those struggling with energy costs. In terms of biodiversity, he should consider two feet in his country, since AOW retirees are required to receive 1244 euros per month without additional pension, while others – for example the directors of the 15 departments of the DNB – receive such an amount every two days.
Unfortunately, the fate of nearly a million elderly retirees without pensions is not so interesting to the participants of the World Economic Forum in Davos; They’d rather hear from Klaas Knot how the DNB is leading the way among all central banks in studying CO2 and biodiversity. Knot is already leading the way, but he’s going in a wacky direction that costs a lot of money and hasn’t taught us anything about the future of banking until today.
Eduard Bomhoff has published his columns weekly in Wynia Week for more than three years. As a donor, you make Wynia Week possible. You can donate over here† Thank you!
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