Over at The Guardian’s Comment Is Free website, Lib Dem blogger Giles Wilkes – liberal think-tank Centre Forum‘s award-winning chief economist – argues that though quantitative easing was needed to prevent financial collapse, it has made the rich richer, and taxpayers will foot the bill for growing inequality. Here’s an excerpt (but NewsHound does recommend you read the full article to enjoy Giles’s imagined budget speech of a year ago):
QE was the right thing to do: it may become the most significant step that Labour took to fight recession. … [it] quite possibly averted an outcome far worse: an economy-wide insolvency so persistent that Britain may have looked upon Japan’s lost decade with envy.
But uncertainty about how much it may work does not excuse silence about its political ramifications. If QE makes inequality worse, it will be the taxpayer who has to fix the problem. In a new research paper, CentreForum calls for greater recognition of the side-effects of QE.
As we go into a period of fiscal austerity, political decisions about “sharing the burden” need a mature understanding of who has benefited from taxpayer-funded interventions. Some on the right mistakenly believe that it has only been welfare recipients and mythical hordes of public sector bureaucrats. This is not so. In the case of QE, it is the wealthy that have the greatest reason to thank Alistair Darling. Whoever designs the next budget should take this into account.
You can read Giles’s article in full here. And look out for his forthcoming Lib Dem Voice article, coming soon!
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