Bernanke’s magical mystery tour*

Posted: 5 October 2015 in Uncategorized
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With tomorrow’s publication of his memoir, self-flatteringly titled The Courage to Act, Ben Bernanke is currently in the midst of his book tour.

Now, in this interview with USA Today, Bernanke is willing to admit that some things went wrong:

For one thing, he says that more corporate executives should have gone to jail for their misdeeds. The Justice Department and other law-enforcement agencies focused on indicting or threatening to indict financial firms, he notes, “but it would have been my preference to have more investigation of individual action, since obviously everything what went wrong or was illegal was done by some individual, not by an abstract firm.”

Bernanke didn’t say anything (at least publicly) at the time. And now, of course, it’s too late.

Also, in his own op-ed piece, Bernanke defends his conduct of monetary policy “to ensure that the economy makes full use of its resources” and “by keeping inflation low and stable, the Fed can help the market-based system function better and make it easier for people to plan for the future.”

Toward the end of that piece, Bernanke does confess that not all is well:

The benefits of growth aren’t shared equally, and as a result many Americans have seen little improvement in living standards.

But then he resorts to the usual defense of the limited nature of Fed policy: “These, unfortunately, aren’t problems that the Fed has the power to alleviate.”

On one hand, Bernanke wants to claim the Fed under his direction saved the U.S. and world economies from a downturn that would have been worse than the First Great Depression. But he is unwilling to admit that the way he (and others in power at the time) enacted monetary policy restored the unequalizing pattern of U.S. economic growth and left most working people falling further and further behind.

What we are witnessing, then, is nothing more than a magical mystery book tour.

*With apologies to the Beatles. For those too young to remember:

Roll up, roll up for the mystery tour
Roll up, roll up for the mystery tour
Roll up (We’ve got everything you need), roll up for the mystery tour
Roll up (Satisfaction guaranteed), roll up for the mystery tour
The magical mystery tour is hoping to take you away
Hoping to take you away

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