The scale of quantitative easing since 2009 is scarcely believable, and the results simply catastrophic
We should be wary of catch-all solutions. Campaigners who claim that every trouble would be addressed by their particular remedy – a land tax, say, or changes to the school curriculum, or some form of alternative energy – are generally monomaniacs. Modern government is a messy business, involving difficult trade-offs. All the easy stuff has already been done.
So I am not going to make exaggerated claims about monetary policy. I will instead say this. A surprising number of apparently unrelated problems – the decline in living standards, the rise in house prices, the widening gap between those who own assets and those who don’t, the fact that we are close to being overtaken in real GDP per head by South Korea, the sense of generational unfairness, the doctors’ strike, even the way in which government departments spray money around on woke campaigns – have been exacerbated by one policy.
That policy was not demanded by the population at large or voted through by Parliament. It was decreed, rather, by the Bank of England in response to the 2008 financial crisis. Starting in March 2009, our central bank, in common with others around the world, began to print money on a scale that would have embarrassed a 1970s Latin American junta.
They called it “quantitative easing” and, while people were aware of it, few realised how radical and transformative it would be.