Bernanke Chooses
February 27, 2008
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Haven't had a chance to write much about the latest economic news, so I've only got this to say: It appears Bernanke has chosen a path out of the mess he created in housing (and the related economy) by refusing to properly regulate the dangerous banking practices of the past few years. (Greenspan started it, but Bernanke finished it up.)
That path is inflation.
With inflation hitting new highs despite a slowing economy, and Ben and Co. repeating their lines about "risks to the downside," it's pretty clear that Bennie and the Inkjets seem set on simply inflating away Americans' debt problems, to the detriment of anyone out there whose behaved responsibly and saved.
Of course, there are still those generous bank bailouts, with more in the works. Bankers and their investors pocketed -- ahead of time -- billions of dollars, and now that the bets they made are coming bad, they're looking for taxpayers to purchase the lousy debts they underwrote, that the free market refuses to consume.
Are we on the cusp of a glorious new American state, where profits are private, and the losses are shared? Where spending beyond your means is perfectly fine because the government will erase your debts via fiat? Where bad risks are rewarded, so that there are fewer incentives for proper allocation of capital?
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