July 26, 2009

THE BIGGEST REASON TO REAPPOINT HIM...:

The Great Preventer (NOURIEL ROUBINI, 7/26/09, NY Times)

Mr. Bernanke deserves to be reappointed. Both the conventional and unconventional decisions made by this scholar of the Great Depression prevented the Great Recession of 2008-2009 from turning into the Great Depression 2.0.

Mr. Bernanke understands that in the Great Depression, the collapse of the money supply and the lack of monetary stimulus during contractions worsened the country’s economic free fall. This lesson has paid off. Mr. Bernanke’s decision to keep interest rates low and encourage lending has, for now, averted the L-shaped near depression that seemed highly likely after the financial collapse last fall.


...is that any replacement would be forced to repeat his mistake--hiking rates into the teeth of a global deflation--in order to prove their inflation hawk bona fides.

Posted by Orrin Judd at July 26, 2009 8:03 AM
blog comments powered by Disqus
« PRE-BROKEN: | Main | AS SOMEONE POINTED OUT THE OTHER DAY...: »