How the QE trillions missed their mark
Making money cheap and plentiful should have boosted future investment. Instead it has pumped up the price of existing assets, with damaging results.
Henry Kissinger once described the vicious nature of academic politics, where tenure protection provides a virtually sanction-free arena for the participants, as being the ideal training ground for the White House.
In the case of economic differences, such spats rarely make the public arena before they are drowned in a flood of algebraic symbols. That's not going to be the case with the battle now under way over the Federal Reserve Bank's management of the global financial crisis.
The opening shots were fired last week when European Central Bank president Mario Draghi virtually conceded that global quantitative easing (QE) had failed and that the latest slowdown in global growth "is probably not temporary". It really burst into the public arena when Larry Summers fired the first broadside.
Read the full article in the Australian Financial Review here (subscription required)