The Non-Success Of QE2

Ryan Avent claims that QE2 was a big success. That is a really strange definition of success. Since August last year, the employment to population ratio has dropped from 58.5% to 58.4%. Meanwhile, real average weekly earnings are down more than 1%. That means that average labor income dropped 1.2%.

By contrast in the preceding 8 months (from December 2009 to August 2010), real average weekly earnings rose 1%, while the employment rate rose from 58.2% to 58.5%, implying an increase in average labor income of 1.5% Even if you instead use the November or January base of 58.5%, we're still talking about a 1% gain, compared to the drop of more than 1%.

While some on Wall Street have gained a lot from QE2, it should be clear that QE2 has only (apart from the many other side effects, that is) served to make most Americans poorer.