Robert Reich: Why cheaper money won't mean more jobs

Why cheaper money won't mean more jobs

Robert Reich
San Francisco Chronicle September 5, 2010


Can the Federal Reserve rescue the economy by making money even cheaper than it already is? A debate is being played out in the Fed about whether it should return to so-called "quantitative easing" - buying more mortgage-backed securities, Treasury bills and other bonds - to lower the cost of capital still further.

The sad reality is that cheaper money won't work. Individuals aren't borrowing because they're still under a huge debt load. And as their homes drop in value and their jobs and wages continue to disappear, they're not in a position to borrow. Small businesses aren't borrowing because they have no reason to expand. Retail business is down, construction is down, even manufacturing suppliers are losing ground.

That leaves large corporations. They'll be happy to borrow more at even lower rates than now - even though they're already sitting on mountains of money.

But this big-business borrowing won't create new jobs. To the contrary, large corporations have been investing their cash to pare back their payrolls. They've been buying new factories and facilities abroad (China, Brazil, India) and new labor-replacing software at home. ............(more)


The complete piece is at: http://www.sfgate.com/columns/reich/#ixzz0ygLtk8VL

independent of the asses who have stolen the US dollar.

i wish we could be totally independent of those big corporations that are making out like bandits in plain sight.

elite no-nation wealthy want more 'free' trade.