Cockroach Ideas: The Kenyan Version as Epitomised by Joe Keiyah

Economics Nobel Laureate Paul Krugman has an interesting characterisation of bad ideas. He says they are like cockroaches in the sense that "no matter how many times you flush them down the toilet, they keep coming back" . One such idea is the view that the Central Bank of Kenya (CBK) is better served by having a chairman who is  not the governor.
My views on this are clear: that is a recipe for confusion in policy signalling; and the role of the chairman - as envisaged - is not similar to that in other very few jurisdictions where the two offices are separate.
While I thought I have argued my case successfully, and even those who were thinking otherwise are on my side, the same crazy thinking seems to be getting back.
This time round, the peddler of this argument is Joe Kieyah of KIPPRA. In a commentary titled "Why the CBK needs board chair, governor", all that Joe does is everything but explain "why". Instead he goes ahead to tell the rest of the world how he doesn't understand the role of monetary policy.
To other non-suspecting Joes, this particular Joe argues that "unlike the CBK governor who enjoys security of tenure, the chair will be a presidential appointee, answerable to the citizens through the executive arm of government. Such accountability will ensure that monetary policy will take cognisance of social policy, which has been conspicuously missing". This is lazy thinking for two reasons:
First, when one reads my paper (third link in this post), one will see that the chairman of CBK as envisaged does not have accountability to the public; but the governor - to the extent that he/she chairs the monetary policy committee (one of the aspects where the chairman does not provide "oversight" - is answerable to a parliamentary committee (and if such committee so requires, the entire parliament); this is close to the practice in the US. This means that Joe is too busy to read carefully on the issue he is commenting about.
Second, the link between monetary policy and social policy is a clandestine way of seeking to politicise the CBK and formalise monetary policy activism. On this, Joe is consistent in peddling the wrong idea; this he did in a commentary in February 2015. The same day this commentary was published, Joe and I were panellists in a forum hosted by the CFA Society East Africa (See picture). In this forum he explicitly argued for the CBK to in some instances tolerate high inflation if that could lead to higher GDP growth. Of course that is a nonsensical argument given the knowledge we have on the link between stability and sustainable growth (see my essay reflecting on the legacy of Prof. Njuguna Ngungú as CBK Governor).

I certainly do not enjoy doing this, but it sometimes becomes compelling to ask of a Prof. to do some homework. So I will ask of Joe to:

• One, carefully study the governance of the Bank of England to be able to see that the role of the chairman of the court (yes not broad) of directors is not the same as what the chair of the CBK is meant to do.
• Two,carefully study the governance of the Federal Reserve System of the US to be able to appreciate that the chair of the Board of Governors is the head/CEO of the Fed just as the CBK governor is the CEO.

If Joe is not brave enough to do the homework, then he will have to carry the tag of being a peddler of cockroach ideas.