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March 16, 2009
Maybe Bernanke is just talking his book
Ben Bernanke, chairman of the Federal Reserve gave an unprecedented interview with 60 minutes.
You can read the transcript at Bernanke Sees Recovery Beginning in 2010
My thoughts:
Bernanke was one of the people who raised the public alarm, asking for more money and power to do his job. That forced him to be more beholden to the public, and this is a symptom of that. I wouldn't be surprised if this is one more step in the decline of Fed independence. Once you start explain things in baby language and begging congress for more power in a crisis, it become harder to say make the difficult and unpopular decisions.
I don't understand what Bernanke has seen that could tell him that the recession is bottoming out or ending this year. I'm not claiming the opposite, I'm saying that the economy a year out is unknowable.
I had every expectation that the Fed would overshoot with monetary policy, leading to higher than normal inflation at the inflation end. If he thinks the recession is bottoming out soon he is less likely to do that. But then he mighty overshoot and we'll get a so called double dip recession. No good choices there, but you cannot stop land the American economy on a dime.
Posted by OneEyedMan at March 16, 2009 8:40 AM
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