What worries Bernanke?
Surely Ben Bernanke “and his colleagues remember what happened in the 1970s,” says Allan H. Meltzer in The Wall Street Journal. The Fed’s “mistaken behavior” in that period, spurred by political pressures, led to “inflation and stagnant growth: stagflation.” Although Fed officials “repeatedly promised themselves” they would work to lower inflation, those “promises were forgotten” when unemployment ticked up. Bernanke indicated to Congress he would similarly put recession concerns before inflation. If the ’70s taught us anything, it’s this: “A country that will not accept the possibility of a small recession will end up having a big one.”
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