To print or not to print? That is immaterial.

A colleague of the European Solidarity Manifesto sent me this link. I imagine that someone somewhere must find this headline surprising, or otherwise it would not have been written: why to write a "non-news" in a newspaper?

In fact, QE's failure is a "non-news". Nothing could be more predictable (except death).

This is my answer to my colleague:

This was written three years ago. You do not need to enter into the intricacies of my Italian language. The title reads: "Draghi's turn is anyway useless, and hence harmful". It was written after the "whatever it takes" statement (in itself an admission of weakness: as Giorgio La Malfa puts it, once you boldly declare that you will do whatever it takes in order to support something, you are basically saying that without your support this thing would collapse). The argument was very simple: no matter what the centralized monetary policy stance would be, the European intraregional imbalances would remain, as it happened in Italy (the only graph of this post reports Italy's real interest rate along with Southern Italy trade balance: the first one wanders a lot, the second doesn't).
 
Besides this fundamental (aka structural) problem, there is another major flaw in QE supporters' minds. I pointed it out in my 2012 book: Eurists really do not understand that money is endogenous. 

Eurism, in all its delusion, is nothing but the theory of money exogeneity pushed to its extremes.

The standard eurist "reasoning" is:
1) you create money by "printing" it (i.e.: money is created by the wicked state);
2) you create inflation by creating money;
 
and hence: you must subtract money creation to the wicked state (because inflation is the Evil).

I do not discuss the conclusions. Let's assume, for the sake of argument, that inflation is the 666 (and let's excuse ourselves from the embarrassing task to explain why deflation is not paradise on earth...). No matter what we think about inflation, points (1) and (2) are blatantly false.
 
Point (1), always contested by post-Keynesian economists, is now refuted even by such reputed and conservative institutions as the BoE (not to say by the scientific literature). Its failure is apparent even to the layman, who mostly did not see a cent of the massive injection of trillion which supposedly took place over the last three years. Draghi prints, but the banks do not lend. Where is the mistake?

Point (2) is refuted inter alia by Bloomberg's article: after printing trillions over trillions we are in deflation! The only way a government can be sure that the money "printed" will be spent, is to spend this money, namely to monetize the deficit. In this case, and only in this case, one can be sure that aggregate demand will recover (and with it, prices). But this is precisely what the Eurists oppose, because of its obvious consequences on income distribution.

Keynes was very explicit on this point: deflation overturns the balance of income distribution in the interest of the rentier (p. 32). Unfortunately, "rentiers" usually do not understand that in order for them to get their money, someone else somewhere else must create value in the real economy, and deflation prevents exactly this process (i.e., what favors rentiers in the short run, kills them in the medium run: in the long run, you know... and in case you do not know, check page 80 of the Tract...).
 
Our Eurist colleagues are liars, serial killers of the most obvious economic truths, but their sons will not escape the consequences of their crimes. We are more or less all aware of what the unescapable outcome of protracted deflation will be, I suppose. It will be war (at p. 36: "short of war"). Unsurprisingly enough, US newspapers are slowly preparing the US median voter.
 
And there is nothing we can do.

Alas, poor Draghi!
 
To print, or not to print?

That is immaterial...