Bernanke wrote 1999 paper on Japan's economy, knows what needs to be done...he just won't do it

[Amerigo Vespucci]

Ben Bernanke: Wall Street's Servant

Dean Baker

Co-Director of the Center for Economic and Policy Research
Posted: August 16, 2010 11:27 AM

http://www.huffingtonpost.com/dean-baker/ben-bernanke-wall-streets_b_683290.html

Last week, the Fed announced that it would use the proceeds from retired mortgage-backed securities to buy up more government bonds. This may have a very modest effect in keeping long-term interest rates low, thereby giving a small boost to the economy.

Such a measure would be reasonable if the economy was basically fine and just in need of a modest lift. But this is not the case.

The unemployment rate is 9.5% and virtually certain to rise in the second half of the year. Job growth has basically stopped and GDP is likely to be in the range of 1-2% in the next four quarters, as state and local governments cut back spending, the stimulus phases down and the housing market resumes its slide.

In this scenario, the Fed should be taking aggressive steps to bring the economy back to full employment. After all, this is part of its job description. Its responsibility is to promote price stability and full employment. There is no concern about price stability in the sense of the rate of inflation being too high right now. Therefore, the Fed's responsibility should be to do everything within its power to reach full employment; obviously, we are nowhere close now.

Its chairman, Ben Bernanke, even knows exactly what needs to be done, as the Wall Street Journal recently reminded us. He wrote a paper back in 1999] about Japan's stagnant economy and mild deflation. Following a recommendation by Paul Krugman, he urged Japan's central bank to target an inflation rate in the range of 3-4%.

http://www.huffingtonpost.com/dean-baker/ben-bernanke-wall-streets_b_683290.html

[Hannah Bell]

1. The PTB, after saving the financial sector with public money, are now deliberately

letting the rest of the economy go to ruin so the banksters can pick up the (cheaper) pieces.

unemployment, bankruptcy of small enterprises, only the big boys or those connected to them survive.

it's deliberate.