Jewish World Review Nov. 16, 2010 / 9 Kislev, 5771
Dr. Bernanke's Magic Elixir for the Economy
By Paul Greenberg
The Fed's previous chairman and guru-in-chief drove interest rates down till he could scarcely get them any lower without diving into the negative numbers. It was a very popular policy. Booms always are till they go bust.
Mr. Greenspan, who in his salad days was an ardent gold bug and admirer of
Ah, but there was a time earlier in this shiny new, fraudulent century when every word
Still, for a while there, Mr. Greenspan's name was spoken with awed reverence every time he delivered himself of cryptic comments worthy of
You may remember that late-'70s movie. The basic plot: A simple-minded gardener, thrown out of a job after his wealthy employer dies, is hailed as the financial genius of the age when his vacant comments are taken for Zen-like wisdom.
The film is supposed to be a comedy but there is something infinitely sad -- and all too relevant -- about it. And about the world's eternal eagerness to believe in simple solutions to complex problems.
These days the problem is how to help the economy recover from the last set of solutions. Remember them? They were doozies. Like having
We all found out soon enough. For now it's the fixes that need fixing. And the simplest fix is as at least as old as the
The country's latest apostle of Weimarization is
Never mind that banks are already sitting on mountains of cash, hesitating to invest it in an economic/political climate in which everything from next year's tax laws to the future of the country's health care is up in the air.
But why bother with details? Just get the Reichsmarks -- excuse me -- the dollars -- flowing again. And if that doesn't work, if things are still a tad sluggish, just print more of them!
Alas, the more printed, the less each is worth, till a whole society can be drowned in worthless money. "Only government,"
For an object lesson in what can happen to the best-laid inflationary plans in real life, and in the all too real economy, see the history of the definitely former
For a more recent example, there's the Panic of 2008-09, whose after-effects are still with us. But we're supposed to believe that the same inflationary approach that led to that financial collapse will get us out of it. Just try a dose of Doctor Bernanke's magic elixir -- a whopping big,
Whatever brief high this medicine produces, it may soon enough prove the kind of cure that assures only a relapse.
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JWR contributor Paul Greenberg, editorial page editor of the Arkansas Democrat-Gazette, has won the Pulitzer Prize for editorial writing. Send your comments by clicking here.
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