Forbes: Bernanke's Blind QE Worship Amounts To Faith-Based EconomicsSubmitted by Michael Nystrom on Wed, 02/27/2013 - 15:00
Forbes | February 27, 2013
During his testimony before the Senate Banking Committee on Tuesday, Federal Reserve Chairman Ben Bernanke had a heated exchange with Tennessee Senator Bob Corker.
Senator Corker leveled a valid (although poorly articulated) charge that the Fed was subsidizing the big banks at taxpayers’ expense. Bernanke countered with a claim that what the Fed was doing was necessary to support economic recovery. Unfortunately, the Fed Chairman’s defense of his “QE3” program was based on belief, rather than evidence. It was also disingenuous.
We seem to be living in an era of faith-based economics. Proponents of “fiscal stimulus” and “quantitative easing” don’t even seem to notice when their policies fail in the real world.
As described here, it is clear that the Fed’s QE2 program, which ran from November 2010 through June 2011, actually retarded the growth of both GDP and employment. Now we have evidence that suggests that QE3 is failing in exactly the same way.
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