Good morning, Mr. and Mrs. America, and all the ships at sea. Let's go to press.
The stock market is having a tizzy again, which is halfway between a hissy and the vapors. It can't decide whether to jump with joy or out the nearest window . . . It compromises by doing both on alternate days. Happy days may not be here again, but zany weeks are . . . What an initiation this has been for the Fed's still new chairman, Ben Bernanke. It's been almost as upsetting a welcome as the one Allan Greenspan got when he became chairman just in time for Black Monday in October of 1987. He met the test, and Chairman Bernanke is staying on top of this buckin' financial bronco, too. So far.
Of course there's been criticism. And there will be more. As well as praise. It all depends which source gets quoted in the papers . . . But after decades in academia, where the viciousness of the politics varies in inverse ratio to the size of the stakes, the political infighting at the Fed must strike Professor Bernanke as tepid by comparison.
The Fed's policies won't win universal approval. No economic policy ever does. Line up all the economists in the world and they still wouldn't reach a conclusion . . . Some of us old fogeys think the Fed's new chairman is too soft on inflation - much too soft - and too willing - much too willing - to bail out the bankers and sub-prime lenders who've made loans they had no business making. The financiers call it moral hazard . . . Keep bailing out those lenders and driving the U.S. dollar down, and the Fed is asking for trouble. The longer the immediate crisis is averted, the greater it'll be when it does hit. Better a mild downturn now than a dramatic recession later or, the worst of both worlds: stagflation. One Jimmy Carter was enough.
Some cynics are already calling the increasingly inflated version of the dollar the bernanke, though American exporters love it. It may not be widely noticed, but the national deficit, fiscal and trade, continues to drop. A cheaper dollar lets American goods compete abroad. But how long before we'll be referring to the dollar the same way we used to talk about the peso or yen? ("The price is $98.50? How much is that in real money?") The Canadian looney is now worth more than the U.S. dollar, for goshsakes.