Thursday 17 October 2019

Quantitative easing? Give the people the money instead

More money may just mean more problems
More money may just mean more problems
Letters to the Editor

Letters to the Editor

The more I hear about quantitative easing ('QE') being used to head off the threat of deflation and to breathe some life into a stagnant eurozone economy, the more I fear about the sanity of leading economists, in that few are willing to question the efficacy of QE.

In the 1970s and '80s, central banks focused on beating rampant inflation (peaking at over 20pc in 1981), which arose from governments financing their budget deficits by printing money. Now, with QE, they seem hell-bent on recreating 'modest' inflation - by printing money. The danger is that they cannot predict how great the effect of QE will be nor when it should stop being used.

As regards deflation, consumers buy things because they want to consume them now (and can afford them) - it's instant gratification people are generally looking for. It would take a massive dose of deflation (way more than the 1pc annual reduction being reported) to persuade most people to defer consumption.

Under QE, the ECB will print money and use it to buy government bonds from banks and financial institutions, thereby pushing bond prices up and bringing bond yields (ie interest rates) down - not forgetting that the institutions will pocket substantial profits when they sell their bonds at such artificially-inflated prices.

The institutions then will have surplus cash which they need to invest, either by buying shares or property (pushing up such prices) or by lending to corporates (to invest in their businesses and boost employment) and to consumers (to lift consumer demand and invest in property, thereby pushing up property prices and retail prices). The net result is that the banks profit and consumers get loaded with debt. The trick will be to stop QE before too much consumer demand is chasing too few goods, or else rampant inflation will result.

But is there another way to achieve the same ends (whilst avoiding banks making unjust profits)? Why doesn't the ECB just send a substantial cheque to each and every person in the EU each month? Some people would invest it (shares/ bonds/ property) and some would spend it, but we would at least avoid creating a plague of consumer debt.

Roger Blackburn

Naul, Co Dublin

Spare me the 'hero' guff

I don't know about any of your readers but to my mind the display given by the Troika was a little hard to take.

I am a hero, apparently. My so-called representatives are also heroes. Isn't it great?

Brave little me, giving up money and future wealth that is assigned to the future benefit of my children for people such as the besuited "professionals" that arrived with austerity to save me. All I had to do was impoverish myself, my wife and my children to save Ireland.

I didn't even have to think about it. Contracts that I held with the State were reduced at the stroke of a pen. My house suddenly became an "earner" through the property tax, which goes to insure the punitive interest rates of the Troika are met. I will have to find new money to pay a utility company that has been established to do what has always been done by the State. It's really beginning to make sense now, this bravery, isn't it ?

More like, it's beginning to feel like Penal Laws all over again.

And what do we get for all this drudgery under the current Troika-friendly Fine/ Gael Labour stewardship? We get praise.

Perhaps now would be a good time to point out that some praise can be false. Indeed, Christine Lagarde's native tongue has a wonderful phrase to describe it - "faux" praise.

Dermot Ryan

Athenry, Co Galway

Teacher assessment

Teachers and their union leaders would have us believe that they have an issue of principle relating to the assessment of their own pupils. As anyone who has been through the Irish education system - or had a dependent who has gone through the system knows - this is a blatant falsehood.

Teachers have been assessing their own pupils for years. Teachers frequently tell pupils that they should take honours / ordinary / foundation level papers in examinations on the basis of their school work and classroom performance. Pupils have often been told that places in honours classes are on the basis of in-house exam results which their own teachers mark. Depending on school policies, students have been compelled, or felt compelled, to take certain exams on the basis of results attained during these in-house school examinations.

So, given that they have been making such decisions for years on the basis of their assessments of pupils, why are teachers now pretending that they won't carry out assessment?

I suspect this is really about a power struggle with the Government in which damage to pupils' futures is - in effect - being viewed as regrettable collateral damage by many teachers and their unions.

Peter Caffrey

Glasnevin, Dublin 9

More empty political promises

When politicians make promises, we know that some election is nigh.

A few days ago Minister for Foreign Affairs Charlie Flanagan announced Ireland would be seeking election to the UN Security Council. He went on to list five "signature foreign policies" representing Ireland's "core values", one of which he said was human rights.

Three years ago this month, Taoiseach Enda Kenny signalled the Government's intention to seek election to the UN Human Rights Council. Ireland's letter seeking election set out a number of "voluntary pledges and commitments... with regard to the promotion and protection of human rights".

One of these pledges was to ratify "as soon as possible" the UN Convention on the Rights of Persons with Disabilities and to implement its provisions. This UN Convention was adopted by the UN in 2006. By September 2014, the Convention had been ratified by 151 UN member states. Ireland was not among them.

"Core values", "signature policies", "pledges", "commitments"? Or just the usual election promises?

Dr Arthur O'Reilly

Mount Merrion, Co Dublin

Real value of the referendum

In arguing that same-sex marriage has nothing to do with parenting or family law, (January 20) Colette Browne misses the point. With the Constitution as it is, a given piece of legislation could give preference to motherhood and fatherhood in such areas of adoption and IVF. But once marriage is redefined in the Constitution, expressing such a preference will be impossible.

Article 41 only mentions marriage in the context of the family, and confers certain rights on all married couples.

The Children and Family Relationships Bill may make no distinction between a same-sex couple's right to adopt and that of an opposite-sex married couple.

If a future Dáil decided to amend adoption law to prefer families that could give a child a mother and father (all else being equal), this would run straight into the new definition of marriage: if all marriages are fundamentally the same, any attempts to favour one type of marriage over another when it comes to founding a family would be, under the new dispensation, discrimination. Any laws that favoured motherhood and fatherhood would be deemed "discriminatory".

This is why the forthcoming referendum is unavoidably about children and the value we place on motherhood and fatherhood.

Éanna Johnson

Killiney, Co Dublin

Irish Independent

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