We'll Show That Economy Who's Boss!
Whoever thought I'd get to unite a trio of dislikes (the Associated Press, Bernanke, and American foreign policy rhetoric) into one blog entry! I was reading the AP article about the Fed rate cuts just a moment ago. While I have no commentary to provide on that particular action, the following two paragraphs of the article stood out to me for the strange rhetoric employed:
"The Federal Reserve will employ all available tools to promote the resumption of sustainable economic growth and to preserve price stability," the Fed said.
The announcement on the deployment of unconventional methods had been expected given that Bernanke and other Fed officials have sought in recent comments to let financial markets know that the central bank will not be out of ammunition to battle the economic downturn even with the funds rate at such low levels.
Yeah, we'll show that economy who's boss!
Am I the only one who finds that phrasing utterly bizarre? I've been a critic of our chest-pounding foreign policy rhetoric (it didn't work for Kaiser Wilhelm II and it won't work for us,either), but it's like those two paragraphs have managed to combine everything wrong with American foreign policy with everything wrong with American economic policy!
Why are we talking tough to the economy? The Iranian leaders weren't intimidated and they are actual people. If it didn't work with Iran, I definitely don't expect the economy to cower in a hole and surrender to the might of American economic policy.
Of course, I wrote this blog mostly because I found the statement somewhat humorous, but maybe it needs to be said: the problems facing America and the world must be solved by reason; not by brute force. Bernanke's entire approach seems like a "brute force" approach. Let's hope this doesn't turn into economic Vietnam.