There's a fascinating, wide ranging interview with Australian economist Steve Keen over at From Alpha to Omega, a podcast series produced by Irishman Tom O'Brien. The interview took place before Bernanke's decision to go for QE Infinity last week.
Steve had previously set out his thoughts on the need for Quantitative Easing for the Public on his blog earlier in the summer. As he rightly observes, QE - as practiced in the United States, UK and even the eurozone - is effectively a transfer of assets to the rich. Especially the ones who got us into this mess in the first place. Even the Tory-leaning Spectator magazine calls QE the ultimate subsidy to the rich.
Steve keeps pointing the finger at the problem that won't go away: debt. Especially private debt (the type that has always creates the biggest economic problems throughout history). One of his solutions (among many innovative ideas) is to give everybody in the country a lump sum of, say, €10,000 or equivalent - printed out of thin air the way you can with fiat currencies - which can only be used to pay off private debts. His idea is a bit more considered than that, but you can see what he means by QE for the public. Rather than for the banks.
Of course here in Ireland we have a big problem - two actually: 1) we're in the eurozone and so can't actually print as many euro as we wish; and 2) our level of private debt is spectacularly off-the-historical scale when it comes to the amount we owe. €10,000 ain't going to hack it...
Which means that in Ireland we will need two parallel solutions in place: 1) an alternative currency that can circulate in parallel to the euro and be used for real world economic activities (my earlier thoughts here, more to follow in another post); and 2) a debt jubilee whereby billions of euro in private debts are simply written off and we start again.
In the meantime, the bankers will keep getting their QE fixes...
ht The Big Picture