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.

Peter G. Klein is a Research Fellow, Associate Editor of The Independent Review, and Member of the Board of Advisors of the Center on Culture and Civil Society at the Independent Institute.
Beacon Posts by Peter Klein | Full Biography and Publications
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