As if we needed it, last week we were served further evidence of the precarious position policy makers find themselves in and the poor state of journalism covering this crucial issue, which is likely to define several generations. This all took place in the events surrounding Janet Yellen’s confirmation hearing before the Senate Banking Committee and I am, of course, talking about how the Fed ever hopes to withdraw and unwind its Quantitative Easing programme.
The headlines after Yellen read her prepared remarks were what you’d expect in this “keep calm and carry on” world of ours – “Yellen sails through confirmation hearing”, “Yellen says imperative to promote strong recovery”, “Yellen says Fed has more work to do to promote recovery” etc etc.
The lack of serious mainstream debate about the perilous course the Federal Reserve, Bank of Japan and, it looks like next to follow, the ECB all have us on is extremely serious. The historical precedents of shoring up failing political systems through excessive loose monetary policies and deficit monetisation are horrific. Would the Nazi’s rise to power have been possible were it not for the botched attempts at forcing the Weimar Republic on the German people?
Almost certainly not.
It is true that times have moved on. Thanks to satellite TV, video net streaming, Premiership football on a Sunday and all the other mass anaesthetics inflicted on an unsuspecting and unengaged population, the crisis over the last 5 years has been notable for its lack of serious social disorder. In Southern Europe things have been more difficult, there were the fleeting occupy movements, the odd banker has been humiliated in front of a committee and Britain’s kids went on a looting spree, but this is nothing compared to the past dramatic events of mass unemployment, revolutions and wars.
In fact, if you are middle class, employed and live in one of the major OECD nations you’re daily living costs might be on the rise and you might have a sense of unease about the future, but for the most part the major sacrifices that have been made have been reducing the number of family holidays in a year. So far you’ve been shielded from the reality of what has to come, unless, somehow, a new economic order is established. But what chance of that, when there is no real pressure?
Without serious pressure for reform, policy makers have taken the apparently easy path. There should be no surprise about this. Why upset the apple cart if you don’t have to?
So, adopting the sense of casual indifference that has gripped our society, I now present to you, word for word, Janet Yellen’s prepared remarks to the Senate Banking Committee.
Read them, if you can be bothered!