Monday, July 27, 2009

The Great Preventer

Nouriel Roubini's caveat-laden endorsement of Ben Bernanke. It would be great if the country could have a real debate about our economic future. Instead we have the abject imbecility of Rush Limbaugh and Glenn Beck and the stealth tyranny of Clinton era top marginal rates.

"Some of these moves have raised important questions: Did the Fed help bail out institutions that should have been allowed to fail? Did it cause moral hazard as reckless lenders and investors were effectively bailed out? How and when will the Fed mop up the excess liquidity that its actions have created? Will these actions eventually cause inflation and a sharp fall of the value of the dollar? Has the Fed lost its independence as it has accommodated the fiscal needs of the government by bailing out banks and printing money to cover large fiscal deficits?

Still, the basic point remains: The Fed’s creative and aggressive actions have significantly reduced the risks of a near depression. For this reason alone Mr. Bernanke deserves to be reappointed so that he can manage the Fed’s exit from its most radical economic intervention since its creation in 1913."

(image credit: Vivienne Flesher, nytimes.com)