The contrast between the parties at this stage is striking. Potential Republican presidential candidates are arguing among themselves about almost everything, from economics to social issues; it is hard to say which ideas and arguments will end up on top. The Democrats, by contrast, are in agreement on most issues, with one major exception: financial reform and the power of very large banks.

The Democrats’ internal disagreement on this issue is apparent. On Dodd-Frank, Democrats differ on the extent to which they should stick up for their own reforms. In December, the White House agreed to a Republican proposal to repeal a provision of Dodd-Frank that would have limited the risk-taking of the country’s largest banks (in fact, the proposal’s language was drafted by Citigroup).

More recently, however, Obama has threatened to veto any further attempts to roll back financial reform.  He a proposing a small tax on the largest banks’ liabilities, which he hopes will encourage “them to make decisions more consistent with the economy-wide effects of their actions, which would in turn help reduce the probability of major defaults that can have widespread economic costs.”

In contrast, the Center for American Progress report devoted very little space to financial-sector reform.

But a serious challenge to all of these views has now emerged, in proposals by Senator Elizabeth Warren, a rising Democratic star who has become increasingly prominent at the national level.  In her view, the authorities need to confront head-on the outsize influence and dangerous structure of America’s largest banks.

Warren’s opponents like to suggest that her ideas are somehow outside the mainstream; in fact, she draws support across the political spectrum.

Warren’s message is simple: remove the implicit government subsidies that support the too-big-to-fail banks. That single move would go a long way toward reducing, if not eliminating, crony capitalism and strengthening market competition in the financial sector.

The big Wall Street banks have enormous influence in Washington, DC, in large part because of their campaign contributions. They also support – directly and indirectly – a vast influence industry, comprising people who pose as independent or moderate commentators, edit the financial press, or produce bespoke “research” at think tanks.

The Democrats need to figure out their policy on Wall Street. In the past, they have simply gone for the campaign contributions, doling out access and influence in exchange. It is now obvious that this is not consistent with defending what remains of Dodd-Frank.

Warren offers a plausible, moderate alternative approach to financial-sector policy that would attract a great deal of support in the general election. Will the Democrats seize the opportunity?  Hillary Clinton is on Wall Street’s payroll.

QE’s impact hinges (1)  transmission (the channels by which monetary policy affects the real economy); (2) traction (the responsiveness of economies to policy actions); and (3) time consistency (the unwavering credibility of the authorities’ promise to reach specified targets like full employment and price stability).

In terms of transmission, the Fed has focused on the so-called wealth effect. First, the balance-sheet expansion of some $3.6 trillion since late 2008 – which far exceeded the $2.5 trillion in nominal GDP growth over the QE period – boosted asset markets. The ECB, however, will have a harder time making the case for wealth effects, largely because equity ownership by individuals (either direct or through their pension accounts) is far lower in Europe than in the US or Japan. For Europe, monetary policy seems more likely to be transmitted through banks, as well as through the currency channel, as a weaker euro – it has fallen some 15% against the dollar over the last year – boosts exports.

The real sticking point for QE relates to traction. The US, where consumption accounts for the bulk of the shortfall in the post-crisis recovery.

Japan’s massive QQE campaign has faced similar traction problems. After expanding its balance sheet to nearly 60% of GDP – double the size of the Fed’s – the BOJ is finding that its campaign to end deflation is increasingly ineffective. Japan has lapsed back into recession, and the BOJ has just cut the inflation target for this year from 1.7% to 1%.

Finally, QE also disappoints in terms of time consistency. The Fed has long qualified its post-QE normalization strategy with a host of data-dependent conditions pertaining to the state of the economy and/or inflation risks. Moreover, it is now relying on ambiguous adjectives to provide guidance to financial markets, having recently shifted from stating that it would maintain low rates for a “considerable” time to ‘paatience’ in determining whether to raise rates.

In the QE era, monetary policy has lost any semblance of discipline and coherence. As Draghi attempts to deliver on his nearly two-and-a-half-year-old commitment, the limits of his promise – like comparable assurances by the Fed and the BOJ – could become glaringly apparent. Like lemmings at the cliff’s edge, central banks seem steeped in denial of the risks they face.