Will Bernanke Succeed?
After only two years, it would appear that Ben Bernanke has failed to rescue the economy, but some are now arguing for patience with the chairman of the fed.
Two weeks ago, the Federal Reserve chairman’s critics complained he was standing idly by while the markets sank, and they clamored for more-aggressive action. Last week, when he did what they asked, they called him a pawn of fickle investors. Had he done nothing, the same critics probably would have said he was ignoring the potential economic damage of a stock-market collapse.
In the end, all this hand-wringing about Mr. Bernanke’s style and demeanor will be long forgotten if the Princeton professor gets his economics right. He’s betting he can head off a recession by quickly lowering interest rates, possibly again tomorrow after the Fed meets. And he’s betting he can do it without igniting inflation.
If things fail to recover, those with set rates on 2nd mortgage loans will be better off than those taking them out in the future.
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