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25 hydref 2021 25 october 2021
gair rhydd Cardiff University’s student paper | Established 1972
Inside: Gair Rhydd takes a look at the 'Korean Culture Wave' taking Western audiences by storm
Does the UK government print money to fund itself? Alex Hughes News Editor
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here are two very different views dominating the debate about the Bank of England’s (BoE) ‘quantitative easing’ (QE) programme – the purchase of government bonds using newly created money. The first, as neatly summarised by GB News’ economics editor Liam Halligan, sees the BoE as having “long been engaged in the monetary financing of government debt, pure and simple.” Halligan has previously referred to it as “the most dangerous economic experiment for generations.” Echoing the same concern, the leading Eurosceptic MP Steve Baker recently wrote that “artificial prosperity . . . had built up as a result of the massive artificial monetary stimulus of recent years.” Their claim is that the treasury’s spending is partly being funded by the BoE’s printing press, presumably because it’s unable to source enough money through the usual routes of taxing and borrowing. This view remains popular in the print media, and last year, a Financial Times poll showed that most major investors in UK government bonds subscribe to it. The other view – held by policymakers and academics – is that QE is a tool that the BoE only uses to achieve its traditional objectives. “We do not . . . set a level of QE and asset purchases in any way related to what the government is going to borrow”, insisted Bank governor Andrew Bailey last November. Former central banker David Miles, of Imperial College London, writes that “accusations that [QE] . . . amounts to ‘printing money’ . . . are unfounded and misleading.” These views appear to be incompatible, but their key difference is conceptual, not factual. This is a complicated issue theoretically, but the basic idea is quite simple. We should start by outlining the role of central banks. These institutions, though they remain mysteries
to many, are the central hub of every modern economy. Contrary to a lot of popular descriptions, their staff don’t spend a lot of time thinking about the money supply, in part because “money” is very difficult to define. In the modern world, money isn’t physical assets like gold or silver, but nor is it strictly the paper currencies issued by governments. Any sufficientlytrustworthy financial promise, or ‘IOU’, can function as money. Government IOUs are the most reliable form, because stable governments have an interest in – and a long record of – maintaining their value, in terms of real goods and services, and in order to do this, they have a large tax base to draw upon. But broad definitions of money can include all sorts of IOUs, whose quantity is not under the central bank’s direct control. So instead, policymakers focus on interest rates, i.e. the cost of borrowing and the reward for saving. In most developed countries the central bank’s tools are kept ‘independent’ from the democraticallyelected government, to shield their decisions from opportunistic politicians trying to temporarily stimulate the economy to win an election. Their overall goals, on the other hand, are prescribed by Parliament; essentially, they’re given two – low inflation and low unemployment. Broadly, they achieve these twin goals by adjusting interest rates. When rates fall, saving becomes less attractive and borrowing is cheaper, so total spending rises. The reverse is true when rates rise. When unemployment is high and inflation is below target, they lower interest rates to boost spending, which in turn incentivises firms to hire more workers and raise prices. The treasury, meanwhile, takes in revenue through taxation, which it spends on transfers, like Universal Credit, and government purchases, like vaccine doses. To read Alex's full breakdown of the Bank of England's in-depth 'quantitative easing' programme, turn to page 5. 5
Canolfan Bywyd Myfyrwyr: Mae'r ganolfan cymorth i fyfyrwyr newydd bellach wedi agor ei drysau yn swyddogol i fyfyrwyr ym Mhrifysgol Caerdydd. Credit: Jack Robert Stacey
Canolfan y myfyrwyr newydd i Gaerdydd
Nansi Eccott
Golygydd Taf-od
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n ddiweddar gwelwyd Canolfan Bywyd y Myfyrwyr Prifysgol Caerdydd yn agor ei drysau am y tro cyntaf. Mae campws Prifysgol Caerdydd ar hyn o bryd yn profi gwaith uwchraddio a buddsoddiad sydd wedi’u disgrifio fel y mwyaf ers cenhedlaeth. Mae’r datblygiadau yn golygu buddsoddiad o
Labour MP found guilty of harrassment Haris Hussnain Contributor
£600 miliwn i drawsnewid y campws a dyfodol y brifysgol. Caiff £300 miliwn ei gwario i greu Campws Arloesedd a £260 miliwn ar addysgu, dysgu a phrofiad y myfyrwyr. Buddsoddwyd y £40 miliwn arall mewn ‘mentrau i sbarduno twf yn yr economi a’r sector diwydiannol.’ Mae Canolfan Bywyd y Myfyrwyr, sydd gwerth £50 miliwn, yn ganolbwynt i’r datblygiadau arloesol ar gampws y brifysgol. Mae’r adeilad wedi’i
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Maintaining a healthy work-life balance
Brain cell differences may be key to knowledge
Ruth Hoey
Aditi Girish Kallanagoudar
Advice Editor
he former Labour MP for Leicester East, Claudia Webbe, has been suspended by the Labour Party after being found guilty of harassment. Webbe allegedly harassed her boyfriend’s female friend, 59 year old Michele Merritt, threatening to throw acid on Merritt as well as send explicit images to her family. The MP has denied harassing Merritt, claiming she only made “courtesy calls” to prevent Merritt from breaching COVID-19 restrictions during her interaction with Lester Thomas, her partner. To read Haris' article on the recent verdict reached against the former MP, turn to page 8.
leoli yng nghalon y ddinas gyferbyn â phrif adeiladau’r brifysgol ar Park Place. Dechreuodd gwaith ar y ganolfan, sydd wedi’i ddylunio gan y practis pensaernïol Feilden Clegg Bradley Studios, yn gynnar yn 2018 ac mae disgwyl i’r gwaith amgylchfyd cyhoeddus gael ei gwblhau erbyn Ionawr 2022. I ddarllen erthygl lawn Nansi ar adeilad newydd y Ganolfan Bywyd Myfyrwyr, ewch i dudalen 6
Contributor
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he stresses of daily life and university can often make it challenging to maintain a healthy work-life balance. With midterm and Christmas deadlines approaching it can be tempting to put our social lives on hold and remain glued to a laptop screen until they are over. This can seem like a good idea, and in some cases, it feels as though it is the only option. However, placing the focus only on study can leave you feeling burnt out, drained and unable to do the best that you can. To read Ruth's article on the importance of maintaining your worklife balance, turn to page 18.
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cientists, engineers, and inventors find the solutions to our problems. From numbers released by the Royal Society in 2018-19, 1.8% of science, technology, engineering, and maths academic staff aged 34 and below are black. In physics and chemistry, the proportion of black researchers stands at zero percent (rounded down). Further to this, no black scientist has ever won a Nobel Prize. In honour of Black History Month, this article will highlight on the achievements of a number of notable black scientists throughout history. To read Aditi's full article into the promising science of brain cell differences, turn to page 23.
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