Rick Perry vs. Ben Bernanke: Round One

[naaman fletcher]

Source: Rolling Stone

For those who don’t remember QE, this is a magical money-printing program the Fed has been using two years in a row to artificially prop up the economy (well, parts of it, anyway). “Helicopter Ben” Bernanke has printed a couple of trillion dollars, just waved a wand and invented them, then used those funds to buy things like mortgages and t-bills.

That this is a terrible idea ought to be self-evident. The irritating thing is that this ought naturally to be a campaign issue for progressives, because the most direct consequence of QE is to magnify the income inequality problem, as this study of the British version of QE (decried by our witty friends at Zero Hedge as the winner of the “real men of captain obvious genius award”) concluded. The study by Dhaval Joseph of BCA research concluded that QE might have been a factor leading to the British riots.

The reason QE is “good for the rich and bad for the poor” is obvious: by pouring trillions in jet-fuel cash into the inequity engine that is the banking sector, we’ve seen massive increases in share prices and corporate profits, without any resulting increases in wages. As the Joseph study concludes:

Real wages – adjusted for inflation – have fallen in both the US and UK, where QE has been a key tool for boosting growth. In Germany, meanwhile, where there has been no quantitative easing, real wages have risen.



Read more: http://www.rollingstone.com/politics/blogs/taibblog/rick-perry-vs-ben-bernanke-round-one-20110816

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Why Democrats continue to support this stuff I have no idea.

[bemildred]

1. Going to need a lot of butter.

:popcorn:

[naaman fletcher]

4. Taibbi

Is intellectually honest and does not let the fact that he supported Obama get in the way of honest analysis, like most here do.

[xchrom]

5. move over...

:popcorn:

[CarmanK]

2. Actually, the US is a sovereign nation and the fed was right!

The fact that we are a sovereign Nation and can print our money in time of need and crisis is of great benefit to the country and to meet its emergency needs. As Warren Buffett pointed out, it was a reasonable alternative to defaulting on our debt. The dollar may have devalued elsewhere, but it would have still saved the full credit of the US of AMERICA.

[naaman fletcher]

3. If you read the article

You see that it was not to the benefit of the people, but rather to the benefit of a small group of people... the bankers who caused the mess in the first place.

[daa]

6. Especially when Obama was unwilling to step up along

with the dem majorities he had in the house and senate. Ben was all we had.

[banned from Kos]

7. Taibbi is a financial idiot. Krugman called for $4 trillion in QE in 2009.

Deflation creates rampant unemployment and decimates the average worker's assets. The Potter's of the world benefit from the despair like depths of the bottom of the business cycle to buy those assets on the cheap. When prices fell like in 2008 dairy farmers were shooting cows because they could not afford to feed them while milk was $1.99/gallon retail.

Taibbi should have taken a finance class.