More QE

So, the Bank of England has announced another £75bn on quantitative easing. Bad news.

More quantitative easing means more kicking the can down the road. It means preventing markets from adjusting, and it means perpetuating the misallocated capital, excessive risk-taking, and over-leveraged balance sheets that got us into this mess in the first place. To put it simply, printing money does nothing to solve our current problems. If anything, it makes them worse.

There will be no return to sustainable economic growth until the authorities realize that we can’t defy economic gravity forever. Recessions are about adjustment and recalculation, and as long as policy is designed to prevent the liquidation of bad investments, the paying down of debt, and the reallocation of scarce economic resources, recovery will remain elusive.

Here are the economic policies we need: an effective bank resolution regime, a stable monetary environment, and a thoroughgoing commitment to removing tax and regulatory barriers to investment and entrepreneurship. Right now, we aren't getting any of them.