Friday, August 29, 2014
YOLO COUNTY NEWS
99 CENTS

Ben Bernanke’s big bet

By
From page A10 | June 21, 2013 |

On May 22, an elderly man with a bald head and a close-cropped gray beard spoke to a highly attentive audience and, as he spoke, world markets swung back and forth, hanging on nothing as concrete as actual words but more on nuance.

At that moment, when he addressed the U.S. Congress, and indeed maybe in every public moment since, Ben Bernanke has been the most powerful man in the world. Behind his polite but somewhat nervous manner one sees a man who is clearly intelligent and apparently benevolent, but who, when he speaks, lacks the authority and confidence of his predecessor Alan Greenspan, previously known as “the maestro.”

Although that description would clearly be contested by many (myself included), Greenspan held the position of Federal Reserve chairman for 19 years, and oversaw what was mostly a period of prosperity for the United States. Maybe his most brilliant feat during his tenure was knowing when to end it and turn the reins of the ill-fated economy over to Bernanke.

In early 2006, Bernanke took the position of Fed Reserve chairman and inherited a U.S. economy that could most simply and accurately be described as a mess. Despite his calm, unassuming demeanor, Bernanke has adopted unprecedented (some would say radical) policies. Simply stated, he has forced interest rates to essentially zero, and created huge liquidity by “printing” nearly 3 trillion dollars. The intention is to “prime the pump” and push the flailing U.S. economy into motion.

The measurable metrics for success (economic growth as measured by GDP, and an improvement in employment) have not been seen, and the risks (inflation, and loss of faith in the currency) also have not clearly emerged. What has happened is a huge bull run in the stock market to record highs.

Bernanke believes he can gradually withdraw Fed support and the economy (and the stock market) will continue to grow unassisted. Opponents to this aggressive policy believe that this economic life support (money printing) has created a false recovery and huge stock and bond bubbles that will pop when the support is removed.

The reaction of the markets on May 22, at even the hint of gradual withdrawal of liquidity, supports the view of the Bernanke opponents. We will see.

Greg Johnson
Davis

Comments

comments

Letters to the Editor

.

News

Davis Innovation Center team fields questions

By Dave Ryan | From Page: A1 | Gallery

 
Saving Putah Creek: a quiet concert at sunset

By Elizabeth Case | From Page: A1 | Gallery

Mr. Dolcini goes to Washington

By Tanya Perez | From Page: A1 | Gallery

 
Winton to be feted for her many years of community work

By Bruce Gallaudet | From Page: A1 | Gallery

Researchers solve mystery of Death Valley’s moving rocks

By The Associated Press | From Page: A2 | Gallery

 
California extends review of $25B delta plan

By The Associated Press | From Page: A2

 
Assembly approves statewide ban on plastic bags

By The Associated Press | From Page: A2

Forum explores local mental health services

By Enterprise staff | From Page: A3

 
Solar-cooking workshop set at Food Co-op

By Enterprise staff | From Page: A3

Celebrate the Senior Center at Sept. 9 luncheon

By Enterprise staff | From Page: A3

 
Need a new best friend?

By Enterprise staff | From Page: A3 | Gallery

Equestrian eventing competition slated

By Enterprise staff | From Page: A3

 
Dinner, auction benefit Yolo County CASA

By Enterprise staff | From Page: A3

Kids can sign up for a library card and get a free book

By Special to The Enterprise | From Page: A4

 
Explorit Science Center: Volunteers supercharge summer camp

By Lisa Justice | From Page: A4 | Gallery

Tee off for Davis’ continued prosperity

By Lily Holmes | From Page: A4

 
 
Bodega Marine Laboratory hosts open house

By Special to The Enterprise | From Page: A5 | Gallery

Local group charts a year’s worth of beauty in flowers

By Enterprise staff | From Page: A5

 
Free blood pressure screenings offered

By Enterprise staff | From Page: A5

Name Droppers: UCD honors two of its own

By Enterprise staff | From Page: A6

 
Books, conversation and poetry at Logos

By Enterprise staff | From Page: A7

 
.

Forum

Let’s sell the MRAP on eBay

By Letters to the Editor | From Page: C2

 
Seeing both sides of ‘tank’

By Letters to the Editor | From Page: C2

What if we need MRAP?

By Letters to the Editor | From Page: C2

 
How could tank be helpful?

By Letters to the Editor | From Page: C2

 
Tom Meyer cartoon

By Debbie Davis | From Page: C2

Don’t sentence our police to death

By Special to The Enterprise | From Page: C2, 1 Comment

 
Will Davis see river water?

By Letters to the Editor | From Page: C2

Travel buddy is getting too fat

By Creators Syndicate | From Page: B5

 
.

Sports

Forget the score; focus on the energy brought by Aggies

By Bruce Gallaudet | From Page: B1

 
Returning seniors, new faces lead promising DHS links squad

By Evan Ream | From Page: B1 | Gallery

Devil golfers return from Scotland with smiles on their faces

By Evan Ream | From Page: B1 | Gallery

 
Devils scrimmage with Sac

By Wayne Tilcock | From Page: B1 | Gallery

UCD-Stanford: the clock is down to counting the minutes

By Bruce Gallaudet | From Page: B1

 
Sports briefs: DHS girls fall by the slimmest of net margins

By Enterprise staff | From Page: B6 | Gallery

Wire briefs: Aces cruise past Cats at Raley

By Wire and staff reports | From Page: B6

 
.

Features

.

Arts

‘The November Man’: Who can be trusted?

By Derrick Bang | From Page: A9 | Gallery

 
B Street’s ‘The Ladies Foursome’ is aces

By Bev Sykes | From Page: A9 | Gallery

.

Business

Technology makes a great car better

By Ali Arsham | From Page: C1 | Gallery

 
.

Obituaries

Margarita Elizondo

By Special to The Enterprise | From Page: A4

 
Elaine Dracia Greenberg

By Special to The Enterprise | From Page: A4

.

Comics