BBC reports that The Ben Bernanke gave a speech to the European Central Bank defending Quantitative Easing:

Ben Bernanke hits back at Fed critics

Mr Bernanke defended the [Quantitative Easing] policy as the right response to falling inflation and high unemployment in the US. ... a natural extension of monetary policy, given that interest rates were near zero and could not be cut further. ... hitting back against his critics. He said that their policy of accumulating dollar reserves in order to weaken their currencies and help maintain a trade surplus would hurt the recovery in industrial economies, and this in turn could harm the entire global economy. ... He spoke of a two-speed recovery, in which developing economies like China and India had rapidly bounced back, while industrialised countries like the US, Europe and Japan were growing much more slowly and suffered from high unemployment. ... He said it was unfair on other countries that allowed their currencies to appreciate, as they would be forced to bear the brunt of the economic adjustment.

Several days ago, online only, Juan Gonzalez of Democracy Now interviewed Ha-Joon Chang, "who teaches economics at the University of Cambridge. He’s the author of the forthcoming book 23 Things They Don’t Tell You About Capitalism. His previous book was titled Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism." Chang brought a little balance to the outcry against QE.

Economist Ha-Joon Chang on the G20 Summit, Currency Wars and Why the Free Market is a "Myth"

JUAN GONZALEZ: Well, in terms of the currency debate, clearly the United States now for—and other countries in the world, for more than a year, several years now, have been claiming that China is refusing to peg its currency at what it’s really worth now on the international scene. And now suddenly, though, the tide, especially after the Federal Reserve action in the past week to begin to buy up more bonds and in effect drive the currency value ... of the U.S. dollar down—now the charge is being leveled against the United States. Who’s right here? And what is the role not only of the emerging third world countries, but also of the European Union in this debate?

HA-JOON CHANG: Well, you know, it is quite understandable why Americans are kind of frustrated by the slowness in the adjustment of Chinese currency. I mean, let’s get the facts right. I mean, it has been adjusted, only very, very slowly, so it’s not like China is absolutely refusing to move. But, yes, I mean, given the imbalances that U.S.A. is facing, it looks painfully slow. But on the Chinese side, you have to understand this. I mean, first of all, they don’t want the kind of abrupt adjustment that Japan had to make to its own currency in the 1980s in the so-called Plaza Accord, which then created this huge financial bubble, destroyed the Japanese economy. So the Chinese want to do it slowly.

And secondly, you know, it’s not just China who "manipulates" currency value, as you just said. I mean, the Fed flooding the American economy with this money is also currency manipulation. So the Chinese are rightly upset.

But on the other hand, yes, I mean, the problem is that, since the '70s, we have lived under the kind of notion that only the deficit countries have to make adjustment. You know, surplus countries have to make adjustment, too, but in the last 30 years the reigning orthodoxy has been that, you know, anyone who's spending beyond his means has to be punished. I mean, this is exactly the logic behind the punishment of third world countries in the debt crisis, and later Asian economies and the Argentinean economy. So, in that sense, it’s that, actually, that the very thing that the U.S. have been trying to impose on the world are coming to haunt itself, you know, because the U.S. has been on the forefront of this logic that it’s only the deficit countries that have to make adjustment, and now other countries are legitimately saying, "Well, why don’t you then do the same?"

Notice that Chang doesn't offer an opinion as to, "who's right here." (I mean, you know.) Bernanke is focused on recovery of industrial nations like our own, at the expense of the others. The others are fighting back.

JUAN GONZALEZ: What is your sense of how this will develop and, again, how Europe, which is this other huge power force on the world economic scene, how Europe will react to the debate between the emerging countries and the United States over currency controls?

HA-JOON CHANG: Yeah. Well, first of all, let’s put this into perspective. You know, the reason why the Fed has to engage in this massive quantitative easing is because of the inability of the American political system to agree on continued deficit spending. So all the burden of adjustment is put on monetary policy, and, you know, this is at the root of the problem. So, I mean, in a way, the monetary easing wouldn’t be as big if the American political scene is such that it can continue the stimulus package. But it’s not going to happen, so that we are stuck with this situation.

JUAN GONZALEZ: Well, ever since the financial collapse a couple of years ago, first all the governments tried to engage in some sort of stimulus of their economies, but now the clear debate is over—is the way forward to reduce deficits and to impose austerity on government spending, or is it to continue to stimulate economies and promote economic growth? ...

HA-JOON CHANG: You know, one thing that has to be made clear at the very beginning is that the main reason for these large deficits is not excessive government spending, but the fall in tax revenue due to the collapse in the private-sector demand. So, I mean, if we are in a full implement situation, cutting government spending might create room for the private sector to come in and create jobs and so on. But the very reason why we have this deficit is that the private sector is not investing. And cutting deficit is not going to make them invest, because the root cause of their unwillingness to invest is the problem with their balance sheets. You know, so, I mean, this cut is not going to solve the problem.

But more importantly, in the short run, you know, that this view that it is the best if you cut this deficit as much and as quickly as possible, I mean, that has no economic logic. I mean, for example, the British government says we have to cut this deficit down to basically zero in four years’ time, but, you know, four years is—makes sense in calendar terms, but in economic terms it doesn’t make any sense. I mean, if you want to cut this deficit, you have to cut it to the state of the economy. So maybe that, in some cases, you can cut it in two years; maybe it, in some cases, will have to be 12. Unfortunately, a lot of deficit folks have a hidden agenda. They basically want to roll back the welfare state. They are using it as an excuse to do it. ... And then the kind of political sleight of hand that they have deployed is quite remarkable. You know, I mean, all these crises that have basically been generated by these bankers and other financiers, I mean, these people are still paying themselves billions of dollars of bonuses, while the poorest people are asked to make the adjustment. I mean, this is outrageous.

JUAN GONZALEZ: Yeah, but now you’re seeing one country after another—Greece, France, England, with its austerity measures—

HA-JOON CHANG: Even England, yeah.

JUAN GONZALEZ: And now, of course, the United States, their commission now recommending potential huge cuts in the Social Security and Medicare here in the United States. How do you see President Obama’s policies so far, in terms of the way he’s handling this crisis since he got into office?

HA-JOON CHANG: Well, luckily, the U.S. still hasn’t yet given in to the deficit hoax. But with the Republican victory in the midterm election and this debt commission, it’s coming. But, I mean, he has to resist it. He has to, first of all, buy time to restructure the economy without creating a recession by sustaining this deficit spending, because otherwise our other option is going back to the 1930s. Don’t forget that in the 1930s a lot of countries started cutting this deficit as soon as things looked slightly better, and many of them went back into recession. It’s already happening in Ireland. I mean, they started cutting deficit. They are now in bigger trouble.

Almost all the energy depletion folk see austerity, both personal and government austerity, as the only way forward, while traditional economists see deficit and stimulus spending as the way forward. The economists anticipate a future where the world resumes a growth economy; energy depletion gurus don't see how that can happen without cheap energy.

In a related vein, some of my wife's relatives have decided that for Xmas this year, instead of giving gifts to adults, they are going to spend the same amount paying down their debt. I'm wondering if they heard this somewhere, or came up with it on their own. As I watch the Black Friday ads, I know it is the last idea that retailers would want to see go viral.