Quantitative Easing (QE) was supposed to stimulate the economy by encouraging investment with low interest money. That hasn’t happened, but why? Does no one want to borrow, or do banks not want to lend? My favorite financial columnist, Yves Smith, has laid out both theories. . . . → Read More: What’s Crippling the Recovery: Lack of Investment Demand or Too-Big-to-Lend Banks?
As medieval dragons do, the dragon in the Beowulf epic sleeps on a pile of gold. With magic sword and shield, Beowulf kills the dragon and, mortally wounded, distributes the gold to his grateful people. Today’s multinational dragons sleep not on gold, but on hoards of cash. Meanwhile little firms—the true “job creators”—perish for want of cash. We don’t need to assault the dragons; we do need to tear away the tax privileges on which they depend. . . . → Read More: Capturing the Multinational Dragons’ Gold
Economists conventionally attribute the Great Depression to blunders by the then-new Federal Reserve Bank. According to this story, promoted by Milton Friedman and the Chicago School, after the stock market crash of 1929, the Fed kept interest rates too high, strangling the economy. This story made most economists confident that it couldn’t happen again.
But . . . → Read More: The Great Real Estate Bubble of the Roaring Twenties