Zoe and economics is an interesting collision, isn’t it?

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; one is allowed to reference QE, so long as one maintains at all times a technocratic tone, to indicate that one understands and approves of it as nothing more than a lever to create stability. It was the best idea ever, until you suggest something similar could be done for a social purpose, and then it’s the most perilous idea ever. To interrogate why the benefit must always go to the existing asset-holding class, why human ingenuity can’t devise anything more productive and equitable, is to reveal the shaming depth of your incomprehension.

Because the whole damn point of QE was to raise the price, lower the yield, of zero risk assets so as to get people to go buy riskier ones. Thus lowering long term interest rates.

What this is really betraying is a lack of knowledge of the basics of the system. The government, the central bank, the Bank of England, only control very short term interest rates. Through that they can influence longer term rates but not control them. And through QE and other such things they can influence longer term interest rates but not control them.

That QE moved asset prices isn’t a problem, it was the point.

11 thoughts on “Zoe and economics is an interesting collision, isn’t it?”

  1. To my eye and ear, ZW’s article is not written in her usual style. Or am I just imagining things?

  2. “To interrogate why the benefit must always go to the existing asset-holding class”

    Though she and the Guardian were horrified at the thought of working class people buying their council houses, so she does not in any way want assets to be more evenly distributed.

  3. She’s taken just one economics lesson and that from the wrong person.

    dunno. doubt RM would have given her ref to that Oscar Jorda paper she cites

  4. The style of the article is not hers. But it’s not the Murphatollah’s or even Larry triple-dip-recession-that-never-happened Elliott’s.

  5. “To interrogate why… , is to reveal the shaming depth of your incomprehension.”

    Well, without wishing to be rude Zoe…

  6. “To interrogate why the benefit must always go to the existing asset-holding class,” – er when I am offered (at 69) less than half the pension that females retiring in 1996 (at 60) with the same level of savings got? “the shaming depth of your incomprehension.” Not *my* incomprehension – Zoe’s

  7. John77

    Quite!

    Have a feeling writers in the Torygraph would pick up on that.

    Wonder why ones in the Grauniad don’t. What kind of pension arrangement do they have or are they not looking that far ahead?

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