Federal Reserve Chairman Ben Bernanke has done what he “promised/threatened” to do, said Megan McArdle in The Atlantic. On Wednesday, Bernanke said the Fed would buy $1.15 trillion in long-term U.S. Treasury bonds and mortgage-backed securities, in a flood of “quantitative easing”—or “doing its damnedest to print money”—to revive the economy. In theory, it should work. But in reality? I don’t know, “and I bet Bernanke doesn’t either.”
By going “all in,” Bernanke is clearly showing he “does not want deflation or Depression on his résumé,” said The Wall Street Journal in an editorial. But now we all have to worry about inflation. The Fed can get away with pumping out dollars when the economy is ailing, but we’d all better hope Bernanke can turn off the spigot before we get hyperinflation—or “another asset bubble.”
At least the “grown-ups” at the Fed are worrying about fixing the economy, said Rex Nutting in MarketWatch, rather than getting distracted by the AIG bonus “circus.” The economic outlook has worsened, and Bernanke’s right that this is no time for “half measures.” If we’re lucky, the economy will “start breathing on its own again.” If not, at least loans will get more favorable for most borrowers.
THE WEEK'S AUDIOPHILE PODCASTS: LISTEN SMARTER
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- 43 TV shows to watch in 2014
- It's time to kill school picture day
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- The uncomfortable truth in The Giving Tree
- 5 words that are spelled weirdly because someone got the etymology wrong
- Ban PowerPoint!
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