Quantitative “Easing” and Qualitative Uneasiness

Quantitative “Easing” and Qualitative Uneasiness

Something that the current economic crisis has shown are the systemic contradictions, the un-sustainability of the new "products" of the financial sectors, and sometimes the hypocrisy of economic experts and the proponents of free market and neoliberal reforms who preached throughout the world deregulation, a reduced role of the government in “the economy”, independence of the central banks, and inflation control at the expense of unemployment but now are engaged in the opposite. These experts were especially against the irresponsible printing of money which they saw as dangerous as it could produce inflation and corruption, even when some world leaders claimed that they needed the money to support social programs, protect national workers, and to avoid negative growth and deflation. But just when these experts had convinced almost everyone about the supposed truth of their claims which had become almost dogmatic, we see that with the current crisis the United States Federal Reserve has been engaged in “quantitative easing” i.e. printing dollars. Sure printing dollars is not the same as printing pesos or Dirhams since the dollars has actually strengthened lately in relation to the Euro and the British Pound!

The scandal around the Madoff Investment Securities has shown how bonds traded in Wall Street and other financial markets also depends on trust sometimes deserved others not.

Similar if to a different degree is regular activity in the financial sector, as see in this first person account from Michael Lewis:

"To this day, the willingness of a Wall Street investment bank to pay me hundreds of thousands of dollars to dispense investment advice to grownups remains a mystery to me. I was 24 years old, with no experience of, or particular interest in, guessing which stocks and bonds would rise and which would fall. The essential function of Wall Street is to allocate capital—to decide who should get it and who should not. Believe me when I tell you that I hadn’t the first clue. "

"I’d never taken an accounting course, never run a business, never even had savings of my own to manage. I stumbled into a job at Salomon Brothers in 1985 and stumbled out much richer three years later, and even though I wrote a book about the experience, the whole thing still strikes me as preposterous—which is one of the reasons the money was so easy to walk away from. I figured the situation was unsustainable. Sooner rather than later, someone was going to identify me, along with a lot of people more or less like me, as a fraud. Sooner rather than later, there would come a Great Reckoning when Wall Street would wake up and hundreds if not thousands of young people like me, who had no business making huge bets with other people’s money, would be expelled from finance."

More from Liar’s Poker

At the same time it seems that the French authorities have let out of prison the defrauder that goes by the alias of Lionel Doyen and Ernest Koumang since people continue reporting scam attempts for fraudulent departments in Paris through Craigslist.

Are these all examples of the same phenomenon but at different scales? Who is responsible for all this? Those who play this game willing knowingly or not? How about those who watch in the sidelines? Leaving these hard questions aside there is no doubt that the State can still play a role in regulating the bounds for how much can be gambled and how. Yes, this is a global exchange but what the government of the countries where the leading financial centers are located decide to do should rein these transactions. The remaining question is how much and at what cost? Can this genie be brought back into the bottle?