The Recession Is Your Fault

Thanks to Jeff Tucker for calling my attention to this passage from Chairman Bernanke’s recent speech:

Another concern associated with additional securities purchases is that substantial further expansion of the balance sheet could reduce public confidence in the Fed’s ability to execute a smooth exit from its accommodative policies at the appropriate time. Even if unjustified, such a reduction in confidence might lead to an undesired increase in inflation expectations, to a level above the Committee’s inflation objective.

Emphasis added. The Greenspan-Bernanke Fed — perhaps the most accommodative central bank in human history — is not to blame for inflation. It is our failure to believe in the Fed that causes inflation. Wow.