November 20, 2010
ONE ECONOMY TO RULE THEM ALL:
Rays of Happiness Cutting Through the Economic Gloom (IRWIN M. STELZER, 11/20/10, Weekly Standard)
on’t overlook the reasons to be happy. We have survived a potential financial meltdown, and although much remains to be done to put the financial system on a sounder footing, we seem to recognize that better capitalized banks are one ingredient of such a system. A healthy debate has started, amid predicable acrimony to be sure, about ways to rein in the deficit. Fed chairman Ben Bernanke’s QE2 might, just might, give the flagging recovery a needed shot in the arm. Initially derided at home as a precursor of rapid inflation, and abroad as a method of driving the dollar down, QE2 is now seen by some of its initial critics as appropriate to an economy with lots of idle capacity and core inflation at its lowest level in 50 years and facing the danger of deflation. Increased approval of Bernanke’s move is due in part to the vigorous defense mounted by several key Fed officials last week, and in part to the fact that Sarah Palin publicly derided it. Fears of a massive shift out of dollars are ebbing as euros no longer seem as attractive an alternative as they did before the out-of-control finances of Portugal, Spain, Ireland, Greece and Italy sent investors scurrying for the exits.
And the collapse of all those countries only adds further pressure to the global deflation we've been experiencing for thirty years. Posted by Orrin Judd at November 20, 2010 7:39 AM