There is an old saying that I have long appreciated (popularized by one of my favorite authors, Robert A. Heinlein): ‘Never attribute to malice that which is adequately explained by stupidity.’
The more I observe the tenure of Ben Bernanke as Chairman of the U.S. Federal Reserve, the more this saying pops into my head. It’s an unfortunate truth that we can no longer describe Bernanke in anything but these terms, if we are being honest. He’s either trying to maliciously undermine the U.S. economy, or he is an idiot who has absolutely no idea whatsoever what he is doing. I’m beginning to suspect the latter, although neither would surprise me at this point.
Once again, the economic mess we find ourselves in has been foisted upon us by leaders of both the Democratic and Republican parties, so this is a bipartisan slam. Bernanke is perhaps unique in that he, in his central banking role, has been there throughout the entire thing. He’s been part of every bailout, every big-government spending plan, every ‘investment’ of your tax dollars in private industry, every ‘stimulus’ and ‘recovery’ plan, etc. President George W. Bush (R) appointed Bernanke to his position in 2006 and then, in a stunning example of ‘change we can believe in,’ President Barack Obama (D) reappointed him earlier this year. I guess Obama really did like Bush’s economic policies, since most of Obama’s economic team are holdovers from the Bush era.
If it isn’t evident yet, let me put this in plain English: Bernanke is part of the problem and, thus, is unlikely to be part of the solution. For example, the Washington Post reported this morning that Bernanke is gearing up for another Federal Reserve intervention in our economy (since it’s been working so well so far). This would be another ‘print billions of dollars out of thin air’ kind of exercise, since Bernanke and others still insist that our inflation rate is too low. Of course, the inflation rate they use to make these determinations conveniently excludes things like food and fuel and, as such, aren’t an accurate reflection of actual consumer prices or changes in the cost of living. In fact, consumer prices for food and fuel are seeing significant inflation right now (ask anybody who drives, heats their home, or eats).
Each Federal Reserve injection of money into the economy—euphemistically called ‘quantitative easing’—has been counterproductive. These injections, like an illegal drug, seem to have short-term positive effects but ultimately harm their recipient. They serve to further depress our economy and stave off a real recovery by introducing unnecessary uncertainty into the market, discouraging private investment and saving, and calling into question the stability of the dollar. We are already seeing inflation, cleverly masked by selective exclusion of certain products from the averages, and this will accelerate with any additional ‘quantitative easing’ until we find ourselves in the midst of a new crisis of inflation and, quite possibly, hyperinflation.
So the question is this: is Bernanke so dumb he doesn’t see it, or is he so evil that he doesn’t care? Either way, should he be the man in charge of our national monetary policy?
