Zoe Williams is a mainstream (Guardian) journalist and she is either ignorant or dishonest. (Spot the tautology.) She supports a “People’s QE”. About a month ago, even before Jeremy Corbyn was elected as Labour leader, one commentator on the LA blog under the name of “Peter” predicted that exactly this would happen. He said that Corbyn’s ideas will repulse far fewer than his party-political rivals hope – and attract more than they think. The reason being that often his policies are simply a logical extension of whatever crackpot policies they, the Tories and others, are already pursuing!
For example, all parties support the idea of printing money; so how can politicians who have been quite happy to hand out free money to failed bankers then oppose handing out more free money as “People’s QE”? Of course Mr Corbyn is wrong, but but those who have conceded the initial principle can hardly carry much weight in opposing him.
And HEY PRESTO, up pops Guardianista Zoe Williams today and proclaims: “We do have a magic money tree, it’s called the Bank of England”. She goes on to say that it’s hypocritical to only claim that printing money will lead to inflation when it is done for “social purposes”. She has a point of course, just as our “Peter” indicated. Probably many of those criticising Williams now are not, or insufficiently, critical with regard to “conventional” QE, whereby the printed money is given to banks for loans and not to the government *directly* to spend on “infrastructure” and so forth, as Corbyn has demanded. She fails to mention in her article BTW that the government does indeed get a lot of this QE money *indirectly* through bonds handed to high street banks in exchange for said money. She probably also has some honest detractors, those who are equally critical of current QE policies, but if so Williams is not relaying that to the public.
Williams is either ignorant or dishonest is when she writes: “Quantitative easing is bizarrely unapproachable, even though it’s happening right across the world and its unwinding will dominate the economic picture for years to come”. No it’s not. There have been numerous articles and writings against QE, whether “people’s” or not, from many reputable scholars world wide. If Williams had been a little bit more observant in her research, she would have come across one or two articles posted on the Mises Institute website for example. (Here or here for example.)
Williams is behaving a bit like the Queen, who after the 2008 crash asked why “no one” had seen it coming. That is (sort of) excusable in the case of Queen Elizabeth, not however in the case of “QEen” Zoe – who is a professional journalist.
Had she dug a bit further, she would even have found that the followers of Mises were some of the few people who actually DID warn, accurately, of the coming crisis. See this video for example with Peter Schiff, who is heavily influenced by the Mises school of economics. These people not only knew the crisis was coming, but also that the reason was, yes, quantitative easing. Instead, Williams cites some mainstream economists whose recent work apparently shows “that the causes of this economic crisis, the next and the one before are all, fundamentally, the extension of credit and its impact on house prices.” Well, great: Some mainstream economists seem to be catching on. But they are obfuscating. The “cause” was expansion of credit, period. The “impact on house prices” was simply a symptom.
All that will happen, Zoe, if the government decided to invest the “magic” money elsewhere instead of private mortgages and the like is that the first symptom (bubble) of the next crisis will appear “elsewhere” instead of in the housing market. Williams writes: “the idea that we have a centrally planned, carefully stewarded monetary policy, with finite creation and demonstrable long-term aims, which some loonie leftie wants to come along and unravel, is simply wrong.” Yes, true. But that is because putting the words “centrally planned” and “carefully stewarded” in one sentence is patently loony to start with. Zoe wants to imply one thing: That it is possible to have a “centrally planned, carefully stewarded monetary policy, with finite creation and demonstrable long-term aims”. Just put the right-on, right-thinking people in charge, QEen Zoe is saying, just give them the Ring of Power, take it away from the nasty non-left people, and everything will be just dandy.
Whether QE or “people’s QE”, it’s loony. If Zoe Williams had wanted to look, she would have found out. But she didn’t. Or if she did, she didn’t tell us. So she’s either ignorant or dishonest.