
 |
|
May 22, 2013
John Thorne:
They launched the 'Arab Spring' but now yearn for the good old days of a strongman
May 20, 2013
Richard A. Serrano: Is Meir Kahane's assassin now a changed man?
Melissa Healy: Genetic copies of living people from embryos no longer science fiction
Jewz in the Newz by Nate Bloom : Jews Inducted into Rock Hall of Fame; Anton Yelchin co-stars in New "Trek" film; Kutcher (but not Kunis) visits Israel; Jewish TV Star Praises Jewish Rap Star
The Kosher Gourmet by Cathy Pollak: WARNING: This WALNUT CAKE WITH PRALINE FROSTING, perfect for afternoon coffee, is addicting
May 13, 2013
Rabbi Nathan Lopes Cardozo: Why the giving of the document that would permanently change the world could only be done in desolation
David G. Savage: Church-state, literally? Supreme Court weighing public school graduation in a church
May 10, 2013
Rabbi Berel Wein: Be all that you should be
May 8, 2013
Peter Ford: Why China is welcoming both Israel's Netanyahu and Palestinians' Abbas
Warren Richey: Obama administration quietly backs out of appeal over new contraceptive mandate
Fred Weir: At Kerry-Putin meeting, US-Russia relations thaw --- a tad
The Kosher Gourmet by Leela Cyd Ross : Almost too pretty to eat, this colorful salad with Sicilian inspiration will tickle the taste buds and delight your visual sensibility
May 6, 2013
May 3, 2013
Kids, kittens the Same? With employee perks at struggling Internet pioneer Yahoo! it's hard to tell
Sandy Kleffman: Artificial kidney offers hope to patients tethered to a dialysis machine
April 29, 2013
Roy Gutman: Poland's new Jewish museum celebrates life, doesn't revisit Holocaust
Mark Clayton: Terrorism in America: Is US missing a chance to learn from failed plots?
Kim Murphy: Boston Bomber's 'Svengali' Revealed
Pete Spotts: Tiny satellites + cellphones = cheaper 'eyes in the sky' for NASA
April 26, 2013
Clifford D. May: Defense in the Age of Jihadist Terrorism
Sharon Palmer, R.D.: How to feel your best -- with plenty of energy, a healthy weight and optimal mental and physical function -- without driving yourself batty
April 24, 2013
|
| |
Jewish World Review
Sept. 1, 2010
/ 22 Elul 5770
Bernanke shows off his popguns
By
Robert Robb
http://www.JewishWorldReview.com |
In his speech at the Jackson Hole retreat last week, Chairman Ben Bernanke tried to show that the Fed still had plenty of ammunition to fire, if necessary, in the fight for economic recovery. Instead, he demonstrated that all he has are popguns.
According to Bernanke, the Fed could: (1) buy even more stuff, creating even more money out of thin air in the process; (2) change its official statement to indicate an intention to maintain an accommodative monetary policy even longer than the current statement suggests; and (3) reduce the already low interest rate the Fed pays on bank reserves.
The only substantive move would be to buy more stuff. But if creating $2 trillion out of thin air by buying securities hasn't triggered a recovery, why the assumption that doing even more of it will turn the trick?
All of these options would be designed to do what Fed policy to date has been designed to do: lower interest rates. But if lower interest rates were the key to this recovery, we'd all already be driving streets paved with gold.
Bernanke believes that the problem is a lack of consumer confidence. Consumers aren't willing to spend so businesses aren't gearing up to meet a demand that doesn't exist.
The real economic problem, however, is uncertainty. Uncertainty can lead to a lack of confidence, but it is not the same thing. And Bernanke is contributing to uncertainty by indicating that the Fed plans to manage monetary policy based upon quarter-to-quarter economic results rather than for the long-haul.
The economy is awash with cash. Banks and businesses are sitting on trillions of dollars. Business fundamentals are sound. Businesses are profitable and price-earnings ratios are historically low.
If banks are unwilling to lend, interest rates need to be higher, not lower. And lenders need confidence that the dollar will retain its value over time. Despite Europe's recent troubles, the dollar has declined 42 percent compared to the euro over the last decade. The Greenspan-Bernanke period of loose money, which Bernanke pledges to continue, creates lender uncertainty.
Not that there is a big unmet demand by borrowers. They face their own uncertainties.
For there to be a sustainable recovery, the economy must first find solid footing. Yet federal monetary and fiscal policies keep attempting to interrupt the corrections necessary to reach that solid footing, while throwing off new uncertainties all the time.
Here is what is necessary to reach that solid footing, from which a sustainable economic recovery would be possible:
-
The housing correction needs to be allowed to run its course without government efforts to prop up prices or demand.
-
Households need to be allowed to restore and improve their savings without government importuning or incentives to spend, spend, spend.
-
The Fed needs to develop a credible plan to withdraw all the money it created out of thin air and protect the long-term value of the dollar.
-
Congress needs to set tax policy for the next 10 years, not the next two, even if it is in a bad place.
-
The federal government needs to develop a credible plan to reduce spending and borrowing.
Some of this, particularly the last point, isn't likely to happen. But there isn't likely to be a sustainable recovery until federal monetary and fiscal policies become less of a moving target.
If policy is semi-set, economic actors can calculate risks. But if policy is a moving target, risk calculation becomes infinitely harder.
There are still die-hards, unfortunately many in positions of authority, but it should be clear by now that loose monetary policy and deficit spending aren't going to trigger a sustainable economic recovery.
That requires a firmer foundation.
Every weekday JewishWorldReview.com publishes what many in the media and Washington consider "must-reading". Sign up for the daily JWR update. It's free. Just click here.
JWR contributor Robert Robb is a columnist for The Arizona Republic. Comment by clicking here.
Robert Robb Archives
© 2010, The Arizona Republic
|
|

Arnold Ahlert
Mitch Albom
Jay Ambrose
Michael Barone
Barrywood
Lori Borgman
Stratfor Briefing
Mona Charen
Linda Chavez
Richard Z. Chesnoff
Ann Coulter
Greg Crosby
Larry Elder
Suzanne Fields
Christine Flowers
Frank J. Gaffney
Bernie Goldberg
Jonah Goldberg
Julia Gorin
Jonathan Gurwitz
Paul Greenberg
Argus Hamilton
Victor Davis Hanson
Betsy Hart
Ron Hart
Nat Hentoff
A. Barton Hinkle
Jeff Jacoby
Paul Johnson
Jack Kelly
Ch. Krauthammer
David Limbaugh
Kathryn Lopez
Rich Lowry
Michelle Malkin
Jackie Mason
Ann McFeatters
Dale McFeatters
Dana Milbank
Jeanne Moos
Dick Morris
Jim Mullen
Deroy Murdock
Judge A. Napolitano
Bill O'Reilly
Clarence Page
Kathleen Parker
Star Parker
Dennis Prager
Wesley Pruden
Tom Purcell
Sharon Randall
Robert Robb
Cokie & Steve Roberts
Heather Robinson
Debra J. Saunders
Martin Schram
Greg Schwem
Culture Shlock
David Shribman
Roger Simon
Lenore Skenazy
Michael Smerconish
Thomas Sowell
Ben Stein
Mark Steyn
John Stossel
Cal Thomas
Dan Thomasson
Bob Tyrrell
Diana West
Dave Weinbaum
George Will
Walter Williams
Byron York
ZeitGeist
Mort Zuckerman

Robert Arial
Chuck Asay
Baloo
Lisa Benson
Chip Bok
Dry Bones
John Branch
John Cole
J. D. Crowe
Matt Davies
John Deering
Brian Duffy
Everything's Relative
Mallard Fillmore
Glenn Foden
Jake Fuller
Bob Gorrel
Walt Handelsman
Joe Heller
David Hitch
Jerry Holbert
David Horsey
Lee Judge
Steve Kelley
Jeff Koterba
Dick Locher
Chan Lowe
Jimmy Margulies
Jack Ohman
Michael Ramirez
Rob Rogers
Drew Sheneman
Kevin Siers
Jeff Stahler
Scott Stantis
Danna Summers
Gary Varvel
Kirk Walters
Dan Wasserman

Tech Q&A
Mr. Know-It-All
Ask Doctor K
Richard Lederer
Frugal Living
On Nutrition
Bookmark These
Bruce Williams
|