“The Great Depression, like most other periods of severe unemployment, was produced by government mismanagement rather than by any inherent instability of the private economy.”
Milton Friedman, Nobel-prize winning American economist (1912-2006)
Perhaps deciding he has been upstaged enough by Treasury Secretray Hank "King Henry" Paulson, Fed Chief Ben Bernanke threw some heat of his own this morning, telling the House Budget Committee he'd support another fiscal-stimulus package to cut the risk of a "protracted" slowdown, according to The Wall Street Journal.
Keep them fastballs coming!
"With the economy likely to be weak for several quarters, and with some risk of a protracted slowdown, consideration of a fiscal package by the Congress at this juncture seems appropriate," Bernanke said in prepared remarks. The Journal report said that he offered many caveats: "Any stimulus should be 'well-targeted,' he said, and focused on ways to 'help improve access to credit by consumers, homebuyers, businesses, and other borrowers.'"
While his remarks today were focused on what Congress could do to help get the economy back in gear, the newspaper noted that Bernanke's comments last week suggested the Fed is open to more rate cuts: "We will not stand down until we have achieved our goals of repairing and reforming our financial system and restoring prosperity," said the Fed chief.
That sounds good to me. Bring it on Ben, bring it on Henry! You are both late to the party in my view, but if you keep pouring it on now, maybe just maybe things will pick up before they get any worse.
And geez, I can't help but wonder whatever happened to the good old days of limited "hands-off" government a la Ronald Reagan and Milton Friedman for that matter? Oh well, yeah, of course, now I remember-- the laissez-faire approach to regulating the financial markets that political philospophy engendered in large part is what got us into the mess that the economic regulators are finally trying to fix!
Water under the bridge, perhaps, best I not be so negative is what some would say. But it is incredibly expensive water and we will all have to drink it for years to come.
I just thank my lucky stars that by the mere accident of birth on the one hand I am just removed enough from retirement that my 401k may actually recover before that day of reckoning arrives, and on other the other, that the fiscal bacchanalia of the last 20-odd years won't be forgotten soon enough to ever be allowed to occur again in my lifetime.
That's me being optimistic. Because for the sake of my mental health, I can't afford to be anything else!
For some of us, the glass is never half full.