The Guardian reports this morning:
Business leaders are urging the Bank of England to authorise another £50bn of quantitative easing when its monetary policy committee meets today in order to boost bank lending and prevent the economy slipping back into recession.
The Institute of Directors says that without an extension of the current £200bn programme of money creation, there could be "dire consequences" for the government's finances in lost taxes and higher social security spending.
Hang on a minute, isn't this the same Institute of Directors who partners with the far right Taxpayers' Alliance to criticise everything the government does?
And isn't this the same IoD that says that governments must not interfere in markets?
And isn't this the IoD who says the crisis was caused by government?
Yes, it's the one and the same IoD.
They're just a bunch of hypocrites after all.
But some of us have been saying that for a long time.
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Absolutely – the IoD loves welfare, but only for big business. The rest of us are left to fight it out for the scraps that remain once the big guys have taken their cut.
I’m not convinced QE3 would actually do that much besides stoking an asset bubble – there is little evidence that it feeds through to increased productive economic activities. In general I’m wary of QE now. Additional fiscal stimulus has to be the best way forward – in particular a Green New Deal.
I believe this is what should be called the Posen approach. As I wrote on this blog some month ago, Krugman sees Posen a having the best expert writing in English on the Japanese liquidity trap 1990-2002. He appears to have seen off Andrew ‘lost decade’ Sentance. But can he see off King and Osborne?
More [good] money thrown over [bad] money in order to prop-up an increasingly corrupt business, and business model.
And they still will not lend it to anyone…..if more regulation comes out of the discussions going-on at this time, they will then just boost their reserves with the “easing” and still lend no more.
The taxpayer will have a warm glow in his/her heart that their tax Euro/Pound is being well spent/given-away.
The primary benefit of QE in the UK is to reduce the cost of funding the deficit. Effectively it replaced debt at a cost of around 3.5% with debt at a cost of 0.5%, saving the govt £6bn in interest per year, hence reducing the deficit by that amount and keeping the rest of the cost of funding govt debt down. So if the govt can save £6bn in interest and hence not cut other spending by that amout, I am all for it.