The best, being the briefest, explanation of quantitative easing that I have read is that of Simon English in yesterday’s Independent. Chiefly that “no money is actually printed, merely credited to the accounts of the big banks and pension firms in the hope that their balance sheets will open, that enterprise will flow”.
Those uninitiated into the ways of the City may need to read this several times before understanding it and the consequences that flow from it. Remember that socialists and trade unionists have always been ridiculed by their enemies for allegedly believing that they will ‘print money’ to boost services. Under neoliberalism giving a vast gift to those that trashed the economy is seen as the only way to save it.
I would contend that the blurring of the state and the financial sector – always to the advantage of the latter, and shown by the rapid turnover between leading politicians and financiers – is absolutely indefensible. It is clear that only the state should be creating money, that this should be done the traditional way using a printing press, and that high finance is a natural monopoply that threatens every aspect of our society and should be nationalised, with compensation on the basis of proven social need only, immediately.
Once done, financiers will no longer have to complain about public opposition to their bonuses. As civil servants, investment bankers will be graded as executive officers or administrative officers, on up to £25,000 a year (with London Living Allowance) and nobody would begrudge them their £30 reward and recognition bonus at Christmas if they do a decent job.
