Bernanke’s stimulus endorsement

The massive U.S. cash injection into the banking sector “shows signs of working,” said Irwin Kellner in MarketWatch, and now “a good dose of fiscal stimulus,” as advocated by Federal Reserve Chairman Ben Bernanke Monday, is just what the doctor ordered to ease us through our recession. If Bernanke, a Great Depression expert, supports targeted measures such as expanded jobless benefits and aid to states, we should listen. We’ll deal with the “red ink” later.

Looks like “we are all Keynesians now,” said Andrew Neil in The Daily Beast. But as policy-makers revive the dusty theories of John Maynard Keynes—more federal spending to boost the economy—it’s worth recalling “the lessons of history”: limited “Keynesian pump-priming, of the right sort, won’t do any harm—but it probably won’t do much good either.”

Bernanke is harming his credibility and the Fed’s independence by "giving a political green light” to the Democrats’ stimulus plans, said The Wall Street Journal in an editorial. Republicans are “resisting” new “‘stimulus’ spending,” and Bernanke’s backing amounts to an endorsement of Barack Obama. It seems he wants another term as Fed chairman.

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