More Bad Policy from Bernanke
Ben Bernanke is printing money once more. Not content with the current historic expansion in the money supply, Bernanke is headed off to new records. Somehow pumping more liquidity in the system is going to offset the negatives that face employers. How?
If paying an employee $ 35,000 per year means a cost of $ 70,000 per year because of health care mandates, employee payroll costs and litigation risks, how does additional liquidity matter? With Dodd-Frank and the regulators forcing the banks out of the lending business for middle Americans, what difference does additional liquidity and lower mortgage rates make? What is Bernanke thinking?
Bernanke's policies are not without cost, though they seem clearly without benefit. The cost will come when inflation rears its ugly head. Bernanke assumes that can't happen unless the economy is near full employment. He's wrong. We can have inflation and unemployment and they can both grow at the same time. The Democrats were able to accomplish this in the late 1970s which was a prelude to the Age of Reagan.
Perhaps it is time to rethink whether or not we need a Fed. America's fastest growth in GDP was the period from 1865 to 1913. America had no central bank during that period. No Central Bank may be a better solution than what Bernanke is providing.
If paying an employee $ 35,000 per year means a cost of $ 70,000 per year because of health care mandates, employee payroll costs and litigation risks, how does additional liquidity matter? With Dodd-Frank and the regulators forcing the banks out of the lending business for middle Americans, what difference does additional liquidity and lower mortgage rates make? What is Bernanke thinking?
Bernanke's policies are not without cost, though they seem clearly without benefit. The cost will come when inflation rears its ugly head. Bernanke assumes that can't happen unless the economy is near full employment. He's wrong. We can have inflation and unemployment and they can both grow at the same time. The Democrats were able to accomplish this in the late 1970s which was a prelude to the Age of Reagan.
Perhaps it is time to rethink whether or not we need a Fed. America's fastest growth in GDP was the period from 1865 to 1913. America had no central bank during that period. No Central Bank may be a better solution than what Bernanke is providing.
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