Federal Reserve Chairman Ben Bernanke is showing why professors should remain in the classroom — playing harmlessly with their theoretical solutions to made-up problems. You know the old adage, “those who can, do; those who can’t, teach.”
Well, Bernanke can’t. He can’t get the economy moving forward with ideas he cooked up as a scholar of the Great Depression at Princeton.
Bernanke would have us believe his policy of endlessly printing money saved us from another Depression. But what he really did was author the Never-Ending Recession, which could morph into something much more dangerous if our currency craps out.
Yesterday, Bernanke gave Wall Street what it wanted — another round of “quantitative easing,” which in layman’s terms is the endless creation of more dollars that are used to buy securities nobody else wants. This time Bernanke said the purchases would amount to an additional $40 billion a month and the Fed would load up on more mortgage-backed securities.
The intention, the Fed said, is to drive interest rates down even more to help the housing market.
Right now 30-year fixed rate mortgages are averaging just 3.81 percent. Mortgage rates have been below 5.5 percent since 2009 and below 5 percent since the middle of 2010.
And the benefits have been minuscule. If nothing goes wrong between now and the end of this year — and there’s a lot that could go wrong — sales of existing homes might reach 4.6 million units. That’s only slightly better than the depressed levels of 4.34 million in 2009. There were more than 7 million homes sold during 2005, the peak year.
On the one hand, Bernanke is desperately trying to stimulate the home buying/building business so that the advantages seep into the rest of the economy. And it’s not working.
A college professor should know if someone (or something) continues to fail then the teacher is probably to blame. And the blame for this failed policy is entirely on Bernanke.