Even the Fed Can’t Save Obama

Dr. Mark W. Hendrickson, FloydReports.com

As chairman of our country’s central bank, the Federal Reserve Board, Ben Bernanke is expected to put the economy on a sound footing and foster strong economic growth. Unfortunately, Bernanke faces “mission impossible”—partly because the policies implemented by Congress, the president, and bureaucrats account for much of what happens to the economy, and partly because the Fed has already done most of what it can do.

The Fed’s favorite policy for stimulating economic activity is to lower interest rates to encourage individuals and businesses to buy more things and hire more workers. The problem today is that the Fed has already lowered interest rates about as much as it can. Currently, interest rates for U.S. Treasury debt obligations of one-year and shorter durations are at zero percent, and 10-year debt instruments yield only 3.125 percent. Despite these historically low rates, economic activity remains sluggish.

At his June 22 press conference, Bernanke said: “We don’t have a precise read on why this slower pace of growth is continuing.” His critics have been merciless and vicious in heaping scorn and derision upon him. Some have labeled him an “idiot” or “evil.”

While I am no fan of Ben Bernanke or the Federal Reserve System, the name-calling is revolting. Intellectuals can be blinded by their theories, and one of the blind spots that Keynesians like Bernanke have (one shared by many members of the Chicago monetarist school) is that rapid expansion of monetary reserves is crucial to counteracting a recession. As the quick recovery from the severe economic and….

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2 comments to Even the Fed Can’t Save Obama

  • I think it past time to solve this problem. The cancer in the white house can be cured if you we remove the tumor, the route of all this corruption, and crime, and that is Oblunder himself, BHO. This idiot is the worst president we have ever had in the historey of the United Stated. His shucking, and jiving, and talking out of both sides of his mouth has gotten this country into a downward spiral that we cannot get out of unless we get rid of him and his kind. If I could afford it I would get out of this country, and let it self destruct just like the roman did. It seems like nobody cares anymore.

  • [...] we hit a bulls-eye. The Fed is out of ammunition. They risk serious inflation if they pump much more cash into the system. The only factor currently [...]

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