Monday, August 22, 2011
- The Anti Bernanke Rhetoric
You know the populist anti-Bernanke rhetoric is getting too hot when people (however empty headed they may be) start using the word treason.
This is stupid. It smells to me like the thoughtlessness of an angry mob and I have a problem with the angry mob whether it started it's rampage in the union hall, or the prayer meeting. I'd love to be in a position to say that "I'm only gonna say this once", but I know I'll probably have to say it more than that. So here it is:
BERNANKE AND THE FED ARE NOT THE PROBLEM HERE.
Right now things are bad. But for Bernanke's actions they would be worse... maybe much worse. If you think he's the problem, or if the things he's doing are permanent and can't be undone, then you need to read up a little because you're making a mistake.
Even someone like Ron Paul who talks about abolishing the Federal reserve would have to have a facility in place to adjust the money supply (just like Bernanke is doing) or the consequences would be grave. What's that? you haven't heard him talk about that? Really? How strange. It's very unusual for a politician to only talk about one side of a story isn't it? I'm sure he must have mentioned it and you didn't see the story? No? Hmmm. How strange.
The talking heads say that Bernanke's actions are 'stimulus' but that's the wrong way to think about it. While congress is arguing about our long term destination, and dithering back and forth about whether we should detour around the storm clouds to the left or right, Bernanke is taking such action as he can to prevent the plane from crashing. His actions are temporary and can be undone as soon as fiscal policy takes the boot off the neck of private industry.
Congress and the President have failed utterly to do their jobs. They have charted a fiscal course which is irreconcilable with reality. But if they were to quit punishing productivity and rewarding sloth, they would create the conditions for producing real economic growth. If they did that, Bernanke's actions could be (and I believe would be) undone in an instant.
And the really horrible thing is that if and when this happens, all you principled visionaries will be getting on his back raising rates to quickly and stifling growth.
Seriously...grow up people. You're acting like liberals for god's sake.