If you’re a journalist, it’s always exciting to get the chance to interview courageous people – you know, war heroes, revolutionaries, innovators, political dissidents and the like.
Of course when it comes to courage, there’s scarcely a man alive that compares to Ben Bernanke. Indeed, he even had the courage to use the word “courage” in the title of a book about monetary policy knowing very well that doing so would likely lead to all manner of contemptuous ridicule.
FT’s Martin Wolf recently got the opportunity to chat with courageous Ben over “firm, juicy” swordfish and grilled halibut at McCormick & Schmick’s in Chicago. Predictably, the interview is replete with cringe worthy soundbites, some of which we present below.
First, Wolf asks Bernanke about the contention that the policies pursued by the Fed have served to increase inequality. Recall that Blogger Ben penned a lengthy post on this topic several months ago. You can read our critique here. Generally speaking, the former Fed chair resorts to the same line of argumentation to defend himself:
“Rising inequality’s an important issue for the US. But it is a long-term trend that goes back at least to the 1970s. And the notion that the Fed has somehow enriched the rich through increasing asset prices doesn’t really hold up, for a couple of reasons: one is that the Fed basically has returned asset prices and the like back to trend; another is that the reason stock prices are high is because returns are low.”
“It’s ironic that the same people who criticize the Fed for helping the rich also criticize the Fed for hurting savers. And those two things are inconsistent. But what’s the alternative? Should the Fed not try to support a recovery?”
“If people are unhappy with the effects of low interest rates, they should pressure Congress to do more on the fiscal side, and so have a less unbalanced monetary-fiscal policy mix. This is the fourth or fifth argument against quantitative easing after all the other ones have been proven to be wrong. And this is certainly not an argument for the Fed to do nothing and let unemployment stay at 10 per cent.”
