Monday, 3 November 2014
Why is Rogoff silent on QE?
I’ve just Googled “Rogoff Reinhart QE” and met a total blank. Kenneth Rogoff and Carmen Reinhart seem to have written nothing about QE.
Of course I'm well aware that they will have written at least a paragraph or two SOMEWHERE on the subject. But it certainly isn't easy to find.
If you have a decent grasp of economics you’ll know why. But if you don’t get it, here’s the explanation.
R&R have spent the last few years trying to scare us all witless about national debts or the “debt overhang” as they like to call it. (It’s important to use emotive phraseology when you’re into propaganda rather than logic.)
But QE involves having the central bank print money and buy up the debt. Hey presto: the debt vanishes in a puff of smoke.
But that’s disastrous news if your reason for living is to scare everyone on the subject of the debt, and use that as an excuse to promote austerity. So what do you do? Well best just sweep QE under the carpet. Turn a blind eye to it. Pretend it doesn’t exist.