Economist: Bernanke Will Kill Recovery
Most experts, including investment legend Warren Buffett and former General Electric CEO Jack Welch, say Federal Reserve Chairman Ben Bernanke has done an excellent job handling the financial crisis and should be reappointed.
But economist John Tamny isn’t among them.
He thinks Bernanke’s views are insufficiently monetarist to merit his reappointment.
“Rather than defining inflation as something monetary in nature, the Bernanke Fed has reverted to Phillips Curve logic, suggesting inflation results from too much economic growth and too many people working,” Tamny writes in Forbes.
“It would be hard to contemplate a more impoverishing notion than the one that says economic growth is the cause of inflation, and economic weakness is its cure,” he argues.
“What this means is that should the U.S. economy reverse direction in such a way that unemployment falls, the Bernanke Fed would use rate machinations to pour cold water on it as a way of keeping unemployment higher than it otherwise might be,” Tamny explains.
“For this reason alone, Obama should not re-nominate Bernanke.”
Tamny also blames Bernanke for the 9.5 percent unemployment rate, though most others attribute the rise in joblessness to the recession that resulted from the financial crisis.
Bernanke also is responsible for increasing inflation, Tamny says. That one is a little hard to figure also, given that inflation has dropped to 50-year lows.
As for Bernanke supporters, Buffett told CNNMoney.com, “I don’t see how you could have anybody better than Ben Bernanke.”
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