With hindsight, I wish that I had studied Economics at school or college. Perhaps I would now have a better understanding of the seemingly arcane theories and principles of the subject.
When I worked in the Basildon during the early 1980s, a number of my colleagues were Conservative supporters and, I believe, my team leader was actually a Tory Party member. One of their grievances against James Callaghan's Labour Government was that they had "printed money", caused inflation and thereby damaged the economy. I was in a weak position to argue with them, but believed this was a Keynesian approach to create demand in the economy by increasing the supply of money.
I was a bit surprised when this policy was restarted by Alastair Darling, but now it was called "quantative easing". This seemed to be a break with the strict monetarist approach followed by New Labour since 1997. What was even more surprising was that George Osborne, then Shadow Chancellor, supported the policy. Did this mean that Tories now endorsed "printing money"? Apart John Redwood there seemed to be no wider criticism.
Today, I read in The Guardian that the Bank of England, and I quote, "will begin pumping a minimum of £5 billion n a month into City institutions to improve their liquidity". This a part of the response to the crisis in the Eurozone and to head-off a slump. As these "institutions" were responsible for creating the recession it seems a bit rich that they are now being bailed-out.
I know that the Bank of England can effectively "create" money, but the question is who will pay back these vast amounts? I think we all know the answer, the working classes will face a generation or more of austerity policies for bailing out the bankers.
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