Printing Money

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PRINTING MONEY….Ben Bernanke says the Fed still has “powerful tools” at its disposal to fight the recession even though interest rates are already down to zero. Felix Salmon is unimpressed:

The natural response to this is simple: if you still have powerful tools at your disposal, why haven’t you used them already? And why did you enact that final rate cut to zero, which necessarily comes accompanied by all manner of nasty consequences in the repo markets and at money-market funds? That decision certainly made it seem as though the Fed believes a marginal further reduction in the Fed funds rate is still far more effective than any of its other policies.

If I had to guess, I’d say that Bernanke believes there’s a price to be paid for taking extraordinary measures, and it’s a price he’d rather not pay unless he absolutely has to. Printing money may be within his authority, but there’s no surer way of admitting that literally everything else has failed and you’re now on your last legs. I don’t blame him for not wanting to go there if there’s even the slightest chance he doesn’t have to.

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DEMOCRACY DOES NOT EXIST...

without free and fair elections, a vigorous free press, and engaged citizens to reclaim power from those who abuse it.

In this election year unlike any other—against a backdrop of a pandemic, an economic crisis, racial reckoning, and so much daily crazy—Mother Jones' journalism is driven by one simple question: Will America will move closer to, or further from, justice and equity in the years to come?

If you're able to, please join us in this mission with a donation today. Our reporting right now is focused on voting rights and election security, corruption, disinformation, racial and gender equity, and the climate crisis. We can’t do it without the support of readers like you, and we need to give it everything we've got between now and November. Thank you.

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