Thinking Outside the Borders

The day after the U.S. midterm elections, the Federal Reserve is yet again buying securities (it has bought more than $2 trillion of them since 2008), to keep down interest rates. U.S. interest rates have now been at historic lows for two years, a huge gift to the financial industry -- but one that has done little to help the broader economy. Not coincidentally, investment banking bonuses are at record levels, while unemployment remains above 9 percent (officially, that is: the real rate is probably 15 percent), home foreclosures are at record levels, and there has still not been a single criminal prosecution -- not one -- for the reckless behavior that caused the financial crisis.