Quantitative Easing in Frankfurt

As I arrived in Germany's financial capital Thursday on the ICE train from Berlin, the head of the European Central Bank, Mario Draghi, was also in Frankfurt announcing the ECB's quantitative easing program to bring stability to the Euro currency. As required, the ECB will buy short term (up to 3 year) bonds from member countries - on an unlimited basis - to combat the Eurozone crisis.
Essentially, the Bank will step in to buy bonds from countries like Greece, Italy and Spain to ensure that those governments can get manageable interest rates to finance the borrowing required to keep their governments solvent. Additionally, the ECB has given up its "seniority" - its claim to be paid first as a special investor.
This quantitative easing essentially ensures that countries in southern Europe will be able to avoid defaulting on their debts because the ECB will buy as many bonds as necessary to ensure the countries can pay their bills.
This was the backdrop as our delegation from Seattle University began our meetings on Friday in Frankfurt - the financial center of Europe. The city has several nicknames indicating its role in finance, among them: "Mein-hattan" and "Bank-furt". With the businessmen and sky scrapers, the city appeared to be quite similar in many ways to our own financial capital, New York.
Our visit to the Frankfurt stock exchange showed us the origins of trading activity in the city. The largest stock exchange in Germany and the 12th largest in the world, the exchange is operated by Deutsche Börse. Herr Max Ebner from Deutsche Börse provided an informative and interesting overview of the trading floor's operations, and added a real-world operating perspective to the information that we've learned in our finance classes.
Later in the day, we received a special guided tour of the German Federal Bank's Money Museum. We reviewed the origins of money, saw different types of currency used throughout the ages, and used interactive exercises to see the importance of using monetary policy to influence both interests rates and unemployment.
A timely exhibit reminded me of the need for another quantitative easing in the United States. The Federal Reserve Board is directed by law to execute a "dual mandate" to control both inflation and unemployment. This previously non-controversial mandate has been executed for decades, regardless of the political party in charge in Washington. However, the current Fed membership has been reluctant to use its power to ease unemployment in America. The Republicans in the House of Representatives recently moved to eliminate the part of the mandate to keep unemployment low. If the Republicans truly cared about reducing unemployment, they would not try to takeaway the Fed's duty to help with job creation.
The American economy has not produced enough jobs since President Obama's stimulus ushered in the recovery. Since another round of stimulus is unlikely from this Congress, the Federal Reserve should execute its duties under the law and introduce another round of quantitative easing. The European Central Bank has stood up for stability for the single European currency, and the Fed should stand up for unemployed American workers by instituting more quantitative easing.