I honestly have no idea of how Matthew Winkler reached the conclusion that quantitative easing worked in his article at Bloomberg. More precisely, don’t you need to state what QE was trying to accomplish and whether it was worth accomplishing before deciding whether it worked? The “economy’s robust health” he points to as indication of QE’s efficacy only took place after QE ended in 2014. Does causality usually work that way?
I think good arguments can be made that quantitative easing produced headroom during which the economy could recover or that it satisfied public demand that something be done. I’m not sure either of those should be characterized as “working”.
He also completely ignores all of QE’s secondary effects and fails to quantify them. All of this sounds like reasoning from conclusion to evidence to me.
It’s the same circular reasoning Steve Verdon deployed at OTB on defending NAFTA: things are currently ok by some measures, therefore QE worked.
Left unstated is that if things being ok now means both work, then things being less-than-good tomorrow or yesterday must also mean they don’t work. It’s indicative of a person well aware they have no convincing argument.
If I am not mistaken, the QE’s (QE1, QE2 … QEn) had different goals. Initially, it was to keep the banks solvent, and later, it was to provide liquidity. Finally, it was to support the housing market.
From your previous post, Mr. Ritholtz’s #4 is what the FDIC does when a bank collapses, but eventually, the remaining banks pay for the losses. Moreso, the FDIC was fully prepared to assist and expected it would assist. Unfortunately, the call never came.