Oct 28, 2013
President Obama nominated Janet Yellen to replace Ben Bernanke as the head of the Federal Reserve. Obama’s choice of Yellen, an insider to the central bank and its current Vice Chair, sent a signal that his administration intends to continue the policy of “quantitative easing” – printing money to buy bad assets from the banks like mortgage-backed securities.
Political supporters of quantitative easing claim it will provide a “stimulus to job growth.” On that score, recent history shows the policy gets a big, fat zero!
Since the start of the recession in late 2008, this buying spree led the Fed to quadruple the amount of assets it holds from about 900 billion to 3.7 trillion dollars! Yet all this printing of money has resulted in no improvement in the proportion of Americans having a job. The figure of adults employed was at 63% at the start and is currently at 58%. So “quantitative easing” has done nothing for employment.
All this money in the banks’ vaults has done nothing to create jobs. That’s no surprise, since banks and corporations have no interest in creating jobs – only in creating profits. And it’s a lot easier for them to pull in record profits by taking all that free Fed money and speculating, rather than putting it into production. They have turned around and created a whole new housing bubble with all their speculation.
And yet, the Fed plans even more quantitative easing! That’s no surprise either. The government will always act in the interests of the banks and the corporations, and not the working people – unless the working class gathers its forces and intervenes to demand jobs and more.