View Full Version : Quantitative easing, the banks and the rich
The UK government has created £375 billion through quantitative easing - essentially, printing money, although it's all done electronically, so no physical money is printed. We found out recently this only really benefited the rich: http://www.guardian.co.uk/business/2012/aug/23/britains-richest-gained-quantative-easing-bank with the banks using the money to buy dodgy assets from rich people.
That works out to roughly £6000 for every person in the UK. If we limit it to only people working that would be about £13,000 per person. I haven't seen any of that £6000 or £13,000. Have you?
Surely the best way to stimulate the economy is to put money in the hands of people so they can buy goods and services.
Surely the best way to stimulate the economy is to put money in the hands of people so they can buy goods and services.
Good in theory.
Unfortunately, few of the goods bought would have been made in the UK. The japanese TV, european car etc etc. The retail sector might benefit, but only to the tune of a fraction of the cash sent abroad. As for services...................
Our reliance on banking and services as industries as opposed to actually creating things, I think, will be our downfall.
John Little
24-Aug-12, 08:28
Yes it is.
But the QE indulged in so far was done not for that purpose. We are far too dependent on the financial sector and if it collapsed then capital woulD fly out of Britain like lemmings off a cliff. However, because the UK government has never reneged on a debt, our credit is very good. So much of the money was used to buy dodgy financial assets from the rich in order to maintain corporate investers' faith in GB.
It's about Credibility.
http://www.debtdeflation.com/blogs/manifesto/
Steve Keen (the economist who predicted the current financial crisis with frightening accuracy and to whom no one listened) is a very active proponent of the 'debt jubliee' also known as quantitative easing for the public (specifically to pay down private debt or a cash injection for the few enough people without large amounts of debt). Well worth a listen to is this episode of radio 4's Analysis which is an interview/discussion with him at the LSE on Why Economics, specifically neo-classical economics, is crap (http://www.bbc.co.uk/radio/player/b01j5h51).
A debt jubilee would have had a similar result and liquidised and shored up the banks but also and much more importantly drastically reduced private debt and so likely stimulate demand at a time when demand is slowing due to private debt de-leveraging and public sector cuts.
HSBC recently made 8 Billion profit in 6 months despite all it's recent problems. It's hard to see what kind of industry could replace that as a revenue generator.
neilsermk1
24-Aug-12, 12:47
"Our reliance on banking and services as industries as opposed to actually creating things, I think, will be our downfall."
Theone, I think you got the tense wrong reliance on banking services has resulted in our downfall.
This started when the previous Tory government raped our manufacturing and service industries for a quick buck.
secretsquirrel
25-Aug-12, 13:26
When Thatcher decided that the UK would be a service economy not a manufacturing one I cannot remember who it was who said "how can you run a successful economy which sells haircuts to each other?" but it certainly looks to be coming true.
QE was for those who would have recieved a loan/mortgage anway.
"Our reliance on banking and services as industries as opposed to actually creating things, I think, will be our downfall."
Theone, I think you got the tense wrong reliance on banking services has resulted in our downfall.
This started when the previous Tory government raped our manufacturing and service industries for a quick buck.
It is a lot easier and more profitable to make piles of money with financial services without the tedium of factories and having to make stuff. Even after the credit crunch the same will be true. Just wait and see.
John Little
25-Aug-12, 17:57
It is a lot easier and more profitable to make piles of money with financial services without the tedium of factories and having to make stuff. Even after the credit crunch the same will be true. Just wait and see.And jobs? For people?
And jobs? For people?
Check out how many are employed in Financial Services Insurance etc.
John Little
25-Aug-12, 18:13
I mean ordinary people in areas outside the south east. Not bankers and barrow boys.
I mean ordinary people in areas outside the south east. Not bankers and barrow boys.
Didn't you know... People don't matter... All that matters these days is money generation...
Well... When I say that people don't matter that is not strictly true... They do matter when they are getting in the way of the money generation by sucking money out of the system through the benefits system due to lack of jobs, but that's apparently their own fault....
Compulsory euthanasia for the long-term unemployed maybe?
Maybe not... who else would they have to blame for the woes of the country.
Didn't you know... People don't matter... All that matters these days is money generation...
Well... When I say that people don't matter that is not strictly true... They do matter when they are getting in the way of the money generation by sucking money out of the system through the benefits system due to lack of jobs, but that's apparently their own fault....
Compulsory euthanasia for the long-term unemployed maybe?
Maybe not... who else would they have to blame for the woes of the country.
I don't know what the answer is, but people do not set up businesses with the prime aim of employing as many people as possible. I dont know where you learned your history, but all that has ever mattered is money generation. What has 'these days' got to do with it?
I mean ordinary people in areas outside the south east. Not bankers and barrow boys.
So? What do you suggest? And Banking and Insurance is employing people all over the UK. The very few people employed in Merchant and Investment Banking may well be concentrated in the southeast but that is all.
I don't know what the answer is, but people do not set up businesses with the prime aim of employing as many people as possible.
Well... maybe they should... as long as they are still making a reasonable living out of it then why not share the wealth around & employ a few more people?
...What has 'these days' got to do with it?
OK scrap that bit if it pleases you, still doesn't change my point.
I don't really know where I am going with this, but I guess an answer is that the education system (and it is also the responsibility of the individual) to make sure that the available skills match the available jobs. I can't say more as I have never (well only very briefly) worked in manufacturing.
But I stress again, it is not a new thing so blaming the grubbiement or the bankers doesn't wash.
Oh, and I still think blaming Maggie is crackers!
John Little
25-Aug-12, 20:58
So? What do you suggest? And Banking and Insurance is employing people all over the UK. The very few people employed in Merchant and Investment Banking may well be concentrated in the southeast but that is all.If government is for the benefit of financial houses and not of the people, by the people and for the people, then it ain't worth a damn. Government should foster the health and welfare of society by legislation and targeted interventions.
Your philosophy feeds the SNP and will break this nation. Without investment in jobs- real jobs, and the stake in society this brings, then the Unionist party will break the union.
If government is for the benefit of financial houses and not of the people, by the people and for the people, then it ain't worth a damn. Government should foster the health and welfare of society by legislation and targeted interventions.
Your philosophy feeds the SNP and will break this nation. Without investment in jobs- real jobs, and the stake in society this brings, then the Unionist party will break the union.
To me, a real job is a job that challenges, provides income and development to the individual. What else?
John Little
25-Aug-12, 22:24
To me, a real job is a job that challenges, provides income and development to the individual. What else?. That would suffice.
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