Saturday, February 5, 2011

Allan H. Meltzer: Ben Bernanke's '70s Show -

Allan H. Meltzer: Ben Bernanke's '70s Show -

More Wall Street Journalesque prattle about the "coming inflation". Anything in the service of deregulation and tax cuts. There is no useful comparisons to be made with the 1970's economy. Full scale war in southeast Asia, two oil shocks, corruption of the Presidency on, until then, an unprecedented scale, have no parallel to current conditions.

For instructive comparisons, we must look back to the Great Depression of the 1930's. Unregulated financial markets gone bust, social safety nets non-existent and/or unraveling, high unemployment, and a continuing threat of deflation.

The Federal Reserve mismanaged the Great Depression, prolonging it with counter-productive policies and inaction. The financial meltdown of 2008-2009, was held back and we were brought back from the brink of disaster by quick and prudent, if ungainly maneuvering by the Federal Reserve. These actions were the results of the hard lessons learned by the missteps of the 1930's.

While Meltzer conveniently omits the sad case of Japan and it's decades long grappling with deflation, he continues to ring the bell for anti-inflationary policies that would derail any recovery the economy may be experiencing now.

Republicans and their policies of deregulation and their fostering the robber baron culture of the last 30 years have led to the increasing of the divide between haves and have-nots and the slow but sure diminution of the middle class for the sake of the wealthiest segment of our population.

These discredited and exploitive policies must be ignored and their proponents revealed as the immoral and anti-Americans that they are.

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