The dovish monetary position staked out by team Bernanke since late 2007 will temporarily obscure the negative effects of deficit spending, it will ease the political pressure of both Houses and the President. In effect, the Fed has permitted itself to take on a fourth mandate: keeping liberal democrats elected.
The original Fed mandate was price stability, then it morphed into price stability & unemployment, now its moderate growth concerning inflation, unemployment, price stability and keeping liberals elected.
Why can’t we just print more money? Because we can’t kick the can down the road. Why? BECAUSE WE’RE RUNNING OUT OF ROAD.
This monumental Pyrrhic victory is already hitting both the Fed Chair and its FOMC members. Congress is pushing bills that seek to ameliorate the authority that the Fed has accumulated since Vockler. Where’s this going?
We should note that fundamentals matter. The essence of good government is the protection of individual rights, beginning with property rights.
Now that isn’t good enough. We must give up, altruistically, to those who don’t aspire to achieve.
The contradiction is simple: you can have either the Sermon on the Mount or Atlas Shrugged. You can’t have both.