Farce Becoming More Farcical

by Don Boudreaux on November 19, 2010

in Balance of Payments, Monetary Policy, Stimulus, Trade

Here’s a letter to the Wall Street Journal:

Fed Chairman Ben Bernanke, fresh from injecting hundreds of billions of new U.S. currency units into the economy – and from planning the injection of yet an additional 600 billion such units – criticizes the Chinese government for injecting hundreds of billions of new Chinese currency units into the economy (“Bernanke Takes Aim at China,” Nov. 18).  Apparently, when Beijing increases the supply of Chinese currency it does so as part of what Prof. Bernanke ominously labels a “strategy of currency undervaluation,” but when Uncle Sam does the same thing with U.S. currency units it’s called “quantitative easing” and “a move in the right direction.”

And then there’s this gem that you report: “Mr. Bernanke notes that in preventing the yuan from appreciating, China has accumulated a massive $2.6 trillion stock of U.S.-dollar assets.”  No mention by Prof. Bernanke that the Bush-Obama ‘stimulus’ spending was accomplished only because Uncle Sam sold jubababillions of U.S. Treasuries.  Poor, innocent Uncle Sam – heroically borrowing from creditors eager to lend.  And rich, dastardly China – connivingly lending to debtors eager to borrow.

Can anyone articulate an adult reason why we treat the pronouncements and predictions of Prof. Bernanke and other Washington maharajahs more seriously than we treat the proclamations of late-night infomercial announcers or the predictions of Nostradamus junkies?

Sincerely,
Donald J. Boudreaux

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