Monetary Policy

Bernanke is Helping Destroy the Global Economy By Doing Too Much, Not Too Little

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Business Insider has made a list of 'The 13 People Who Are Destroying The Global Economy'. I agree with most of the list, but not the reasons. The most notable example of this is Business Insider's fourth choice, Ben Bernanke.

I am not going to disagree with the lovely people at BI that Bernanke is up there with President Obama and European Central Bank President Draghi as one of the most dangerous people influencing the world economy, but the justification is misplaced:

Bernanke has also received criticism from economists like Paul Krugman for not engaging in enough monetary easing to boost the economy further. Krugman wrote recently in New York Times Magazine, "The Fed is supposed to pump up the economy when it's running too cold, with unemployment high and inflation low. That's where we are right now, in the Fed's own estimation. Yet the most recent minutes, from March, show Fed officials unwilling to take any further action to boost the economy.

Of course. Bernanke is doing too little, not too much. It is the Federal Reserve's lack of action that seems to earn him number four of BI's list that includes a seemingly contradictory group of people including Grover Norquist, Rep. Ron Paul (R-Texas), President Hollande, Chancellor Merkel, and Rep. Eric Cantor (R-Virginia).

BI's main contention with Ron Paul seems to be his opposition to the Fed which has somehow hampered its monetary activism:

His continued insistence on slashing Government spending has informed the Tea Party movement, and any Republican member of Congress that strays too far from their orthodoxy is likely to be challenged in a primary. His rhetoric on returning to the gold standard has politicized the Federal Reserve, helping to constrain Ben Bernanke's actions. He is retiring from Congress in January, but he will continue to use his strong grassroots network to push for smaller government. 

BI also put David Cameron on the list, repeating the tiring myth of his supposed 'austerity program'.

The Federal Reserve has done a huge amount of harm, and Bernanke deserves to be on any list of 'The 13 People Who Are Destroying the Global Economy'. He deserves to be on such a list for doing too much, not too little.

Peter Schiff explained Bernanke's dangerous role in our current discontents to Reason back in April: