"Creating", or "Printing" $85 Billion per month and handing it to the banks is part of the job? It's "Trickle Down" Economics at it's finest...........
With just seven Fed open market meetings before he completes his second term, Mr Bernanke is in no danger of emulating the maestro’s former heights. Last week, the Dow broke its historical record. There were no Greenspan-style celebrations. Conservatives dismissed the surge as a “sugar high” caused by quantitative easing. The left saw it as yet more Fed-fuelled froth that was bypassing Main Street.
Both contain some truth. The $85bn a month in QE3 is fuelling a “reach for yield” that is driving a mini equity boom. And America’s wealthiest 10 per cent are its main beneficiaries. But they ignore the big picture. Without the Fed’s easy money, the stock market would be languishing and unemployment would be rising. Instead of “helicopter Ben” dropping reserves from the sky it would be “lawnmower Ben” shredding the green shoots of the recovery.
History is likely to treat Mr Bernanke more kindly. Peter Drucker, the management consultant, once said: “The greatest danger in times of turbulence is to act with yesterday’s logic.” Mr Bernanke’s chief virtue has been to ignore the normal rule book. As a scholar of the Great Depression, he understood its chief cause was the extinction of credit: the US escaped the slump because it went off the gold standard. The New Deal had little to do with it.
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But Mr Bernanke misses no opportunity to remind people there is only so much the Fed can do: it can help boost demand but it cannot force banks to lend; it can assist job creation but it cannot reverse the fall in median earnings. Most of America’s challenges are not monetary. Since the Fed is not an orchestra, its chairman can never be a maestro. Posterity should reward Mr Bernanke for having the serenity to know that.