Perhaps you hadn't noticed, but in late August 2010 Ben Bernanke took on complete responsibility for everything -- especially everything mediocre or bad -- that occurs in the economy.
I know this because on August 27 and 28 (covered here and here), the Associated Press issued three reports essentially telling readers that it was up to Ben to save us. There wasn't anything Barack Obama, Tim Geithner, Nancy Pelosi, Harry Reid, or then-present Larry Summers could possibly say or do to improve the economic situation, described at the time as "appears to be stalling" in one of those AP items.
Out of this came what has come to be known as "QE2" (the second round of "quantitative easing"), otherwise known as "electronically printing money to buy U.S. debt because possibly no one else will."
Well, it hasn't worked out so well, according to the New York Times, whose Binyamin Appelbaum reported the "surprisingly" pathetic results on Sunday:
Stimulus by Fed Is Disappointing, Economists Say
The Federal Reserve’s experimental effort to spur a recovery by purchasing vast quantities of federal debt has pumped up the stock market, reduced the cost of American exports and allowed companies to borrow money at lower interest rates.
But most Americans are not feeling the difference, in part because those benefits have been surprisingly small. The latest estimates from economists, in fact, suggest that the pace of recovery from the global financial crisis has flagged since November, when the Fed started buying $600 billion in Treasury securities to push private dollars into investments that create jobs.
As the Fed’s policy-making board prepares to meet Tuesday and Wednesday — after which the Fed chairman, Ben S. Bernanke, will hold a news conference for the first time to explain its decisions to the public — a broad range of economists say that the disappointing results show the limits of the central bank’s ability to lift the nation from its economic malaise.
“It’s good for stopping the fall, but for actually turning things around and driving the recovery, I just don’t think monetary policy has that power,” said Mark Thoma, a professor of economics at the University of Oregon, referring specifically to the bond-buying program.
Well, wait a minute. If monetary policy doesn't have that power, what does? Maybe it's fiscal policy, the massive disaster perpetrated by Nancy Pelosi and Harry Reid during the past four budget years (2008 through 2011), with President Barack Obama leading the cheers and signing the bills since January 2009.
Well then, maybe Appelbaum should have addressed how fiscal policy has failed us, and is endangering us. He didn't; you will search in vain for the following words in his coverage: Obama, Democrats, Pelosi, Reid, Congress.
Continuing, with an incredible assertion by Appelbaum that doesn't pass the laugh test in bold:
Mr. Bernanke and his supporters say that the purchases have improved economic conditions, all but erasing fears of deflation, a pattern of falling prices that can delay purchases and stall growth. Inflation, which is beneficial in moderation, has climbed closer to healthy levels since the Fed started buying bonds.
“These actions had the expected effects on markets and are thereby providing significant support to job creation and the economy,” Mr. Bernanke said in a February speech, an argument he has repeated frequently.
But growth remains slow, jobs remain scarce, and with the debt purchases scheduled to end in June, the Fed must now decide what comes next.
I'm so glad that inflation is "closer to healthy levels." Meanwhile, producer prices are up at an annual rate of 4.2% during the first quarter. Binny, my friend, we can only stand so much "health."
As to "what comes next," what happened last time, in my opinion, is that Team Obama and the Democratic Congress told Ben: "Pal, you'd better keep priming the pump or we're going to pin the double-dip entirely on you." Perhaps Ben will be similarly forced into QE3 this time -- after which the Times will again be "surprised" at its ineffectiveness. But with Republicans controlling the House, maybe Ben will pass on QE3 so the administration can blame Boehner. Regardless, you can pretty much count on the Times and the rest of the establishment press to do everything they can to disassociate Barack Obama and his administration from any blame for the calamity it and the Pelosi-Reid Congress have created.
Cross-posted at BizzyBlog.com.