I was thrilled to read Tara Siegel Bernard’s piece about inflation in the New York Times, “Taking a Cue from Bernanke a Little Too Far.” This is great example showing the difference between right wing dogma and opportunism on the one side and the real world on the other.
In recent years, The Right has turned Bernanke into one of the great bugaboos of our age with his “quantitative easing” program. I don’t really understand QE very well. My walking-around idea is that the Fed buys up bonds by literally creating money. This injects heretofore non-existent money into the economy to bond sellers. The bond sellers (companies or banks) then presumably use that bond money to buy “stuff” such as capital equipment or give loans to business. They, in turn, use that cash to expand their business. [EDIT: My definition of QE is probably wrong. Try reading here if you want to get better informed on specifics of QE: http://en.wikipedia.org/wiki/Quantitative_easing.]
The Right’s point of view is that this is an Awful Thing. All this money getting injected into the economy would inevitably lead to catastrophic inflation. Seriously – catastrophic, End Times level inflation. Some of them were not as hyperbolic, but if you listened to what Limbaugh, Hannity, Levin, Larry Kudlow and pretty much all of the right wing radio entertainers have been saying for years – and if you believed them – you would swimming in gold right now because it would be the only thing keeping you warm at night and food on your table by now.
Of course, none of that has happened, despite years-long attempts to paint that picture. Inflation isn’t catastrophic and none of the End Times scenarios have come to play or show any signs of happening soon.
In a sane world, there would be be some accountability for being so incredibly wrong. I don’t mean government-steps-in style accountability. I just mean all of us, walking around, ought to remember what these people said (‘”End Times!!!”) and keep that in mind when they tell us about the next End Times level catastrophe they manufacture (cf. Gay Marriage).
Kudlow especially resonates with me. He has actually admitted he was wrong at about 2:30 into the video. He has a kind of happy way to talk about how he was wrong and he doesn’t really hedge, so – kudos, har har – to him. But this is in dramatic contrast to what he was saying for a long time on his radio show (and presumably his tv show). He’d have expert after expert come on and he’d inject his own opinion and special take on the up-coming inflation catastrophe. He would do so with absolute confidence for weeks and months on end. A 20 second mea culpa doesn’t cut it in my opinion.
It would be really nice to see some accountability out there. I’m not holding my breath, but I’m ever hopeful. 🙂
[Update 1: HA! Kudlow is arguing this morning that Bernanke’s pulling back from QE2 is “too soon.” He’s predicting a bunch of bad things will happen that QE was designed to solve in the first place, and which he originally said QE2 couldn’t solve at all! Why is he credible? HA!]