Mark Carney is Canadian by birth. He’s also Irish, at least by citizenship. He went to college at Harvard, then joined Goldman Sachs. He worked in the Canadian Department of Finance, eventually becoming the Governor of the Bank of Canada. That’s a pretty good career by itself, but he didn’t stop there.

He’s since jumped the pond and is now the Governor of the Bank of England as well as the President of the G20’s Financial Stability Board.

From all this I presume the guy knows a thing or two about finance and central banks. Which is what makes the topic of his recent speech so interesting.

Mr. Carney took the stage at a Lloyd’s of London event and told them that a major threat to their business was climate change.

Whether or not someone agrees with his assessment is beside the point. The real question is: Why in the world was Mark Carney, the Governor of the Bank of England, talking about climate change?

When asked why Mr. Carney chose this topic, his spokesman pointed out that the Bank of England has responsibility for price stability. Anything that might disrupt that stability falls under the authority of the central bank.

Hmmm.

On that basis, Mr. Carney could claim that he has authority over Parliament, David Cameron, or even the Queen! Don’t those institutions and people regularly create instability in the markets with what they say and do?

If Parliament decided to raise taxes, or cut social payments, things might get dicey.

If David Cameron announced greater involvement in Syria, the markets might not take to it kindly.

If the Queen chose to take up skydiving, who knows what would happen!

In each instance, Mr. Carney could claim jurisdiction. Prices might wobble, and darn it, that’s his area!  Oh, and don’t be fooled by what his stamp of approval would mean. It’s almost certain to include lower standards of living through higher taxes or regulations, meant to curb whatever behavior is causing turmoil.

Except, when claiming climate change fell within his purview, he forgot one thing: He’s the Governor of the Bank of England, not the Lord and Master of All That He Sees.

His bailiwick is monetary policy. When granted powers, the Governor of the Bank of England is expected to stay in his own sandbox. But why should he? Others have proven that power is up for grabs.

For example, the European Central Bank (ECB) now reviews lending standards in individual countries. A banker from Brussels can tell a German loan officer that he’s out of line, or make a Greek bank set aside more cash for potential write downs.

This might sound abstract, but it hits home if you were the German borrower wanting to buy a home, or if you owned shares in the Greek bank and watched the value of your holdings drop.

Now the ECB wants more. They are pushing for greater integration of budgetary controls and fiscal policy.

That’s a fancy way of saying they want the central organization of the European Community to have power over the annual budgets of each nation. It could change what they spend on social programs, defense, and other national issues.

The French Economy Minister has gone so far as to suggest that the EU government be able to make fiscal transfers between states. That means moving money from one country to another. I’m sure the Germans will be thrilled to see their budgetary surplus shipped off to Spain and Italy!

It’s no different in the U.S. The Fed has long since taken steps to affect employment, even though there is zero evidence its tools can make a difference in the job market.

After the meltdown, the Fed was given even greater control over our lives. The new Consumer Financial Protection Bureau (CFPB), which sets the rules for everything from mortgages to credit cards, is housed in the Fed. Remember, this is a body with no elected oversight, and a budget they make up themselves because they print whatever they need to keep the lights on.

To see if they are costing you money, or interfering in your life, just think about the current state of bank lending.

Anyone trying to get a home loan lately knows that it’s all but impossible. Banks don’t want to lend to anyone but the most credit worthy because they are now responsible for verifying the borrower has the ability to pay back the loan.

Isn’t this the borrower’s job? Not in the eyes of the CFPB! When banks don’t lend, consumers don’t spend, which not only stops people from pursuing the goals in their own lives, but also slows down the broad economy.

This is just another example of a monetary authority overstepping its bounds, but it didn’t start with them.

Congress foisted these changes on the Fed (seeking full employment and housing the CFPB) because they couldn’t get these things done on their own.

There’s good reason such responsibilities weren’t originally under the Federal Reserve… Voters know that a central bank isn’t equipped to handle them. Monetary policy authorities have no business working on employment issues, and certainly don’t belong in the middle of a local transaction between a bank and a client.

But our Congress has a long history of such intervention. They are certain they have the authority to oversee most every aspect of our lives, and use our money to do it. Their justification is right there in the Constitution, hidden in two little words – general welfare.

Section 8 of the U.S. Constitution grants Congress the power to levy taxes and duties, and use the funds to pay debts and provide for the common defense and general welfare of the United States.

Only problem is, this phrase has been taken to mean anything and everything that Congress can think of.

This seems off base since James Madison, one of the Framers of the Constitution, wrote in Federalist Paper #41 that these powers are specifically limited to what is listed in the rest of the Constitution. Everything not listed is reserved for the individual states.

Unfortunately, I’m not sure how many people in power, be it in central banks or elected bodies, are interested in limiting their reach. It sure feels like every time they stretch their authority further, we are the ones who pay. But it’s for our own good, right?

Rodney