Tag: economics

Financial innovations?

Or maybe those rising stock prices are the result of all that additional productivity now made possible by 3G/4G, Android, and iPad:

Lauren is correct.  Look at the TNX compared to when QE was instituted in all cases and then what happened when it ended.  When The Fed intervenes it says it is trying to depress interest rates but in fact the opposite happens.

Why?  Because interest rates are the time-value of money including the expected devaluation.  When you raise that figure rates go up.

In addition credit and currency are fungible.

Peter has long argued for “coming hyperinflation.”  He’s been dead wrong.  He’s wrong because the inflation already happened through the issuance of bogus credit.

Doubt me?  What do you call stock prices going up by a factor of 14 over the last 30 years?

Some of you will recall I tried to explain that credit was money to Mr. Schiff, but to no avail.  It’s not that M2 doesn’t matter, it’s just that Z1 matters more.  What I don’t understand is why those individuals who say that debt doesn’t matter always insist on increasing taxes.  If debt doesn’t matter, then why tax anyone?  We’re already borrowing and spending more money than we used to tax-and-spend, so obviously, there is no need to fund the government through taxation.

End this depression II

In Chapter Two, Depression Economics, Krugman resorts to his favorite analogy, the babysitting coop, whose travails were chronicled by a 1977 article in the Journal of Money, Credit and Banking.  This is at least the third book in which he has resorted to the analogy, this time to demonstrate that overall lack of demand can’t hurt the economy and that “your spending is my income and my spending is your income.”  But this time, he also cites the 150 babysitting couples as an example of his proposed cure for the global economy

“That’s where we come to the third lesson from the babysitting co-op: big economic problems can sometimes have simple, easy solutions. The co-op got out of its mess simply by printing up more coupons.

This raises the key question: Could we cure the global slump the same way?  Would printing more babysitting coupons, aka increasing the money supply, be all that it takes to get Americans back to work?

Well, the truth is that printing more babysitting coupons is the way we normally get out of recessions. For the last fifty years the business of ending recessions has basically been the job of the Federal Reserve, which (loosely speaking) controls the quantity of money circulating in the economy; when the economy turns down, the Fed cranks up the printing presses. And until now this has always worked. It worked spectacularly after the severe recession of 1981–82, which the Fed was able to turn within a few months into a rapid economic recovery—“morning in America.” It worked, albeit more slowly and more hesitantly, after the 1990–91 and 2001 recessions.

But it didn’t work this time around. I just said that the Fed “loosely speaking” controls the money supply; what it actually controls is the “monetary base,” the sum of currency in circulation and reserves held by banks. Well, the Fed has tripled the size of the monetary base since 2008; yet the economy remains depressed. So is my argument that we’re suffering from inadequate demand wrong?

No, it isn’t. In fact, the failure of monetary policy to resolve this crisis was predictable—and predicted. I wrote the original version of my book The Return of Depression Economics, back in 1999, mainly to warn Americans that Japan had already found itself in a position where printing money couldn’t revive its depressed economy, and that the same thing could happen to us. Back then a number of other economists shared my worries. Among them was none other than Ben Bernanke, now the Fed chairman.

So what did happen to us? We found ourselves in the unhappy condition known as a “liquidity trap.””

Krugman’s first claim is harmless enough.  Obviously, an overall lack of demand can hurt the economy, those who erroneously insist that supply is always capable of creating demand notwithstanding.  His second claim is partially true, but incomplete, because not all spending comes from income.  A considerable amount of spending also comes from credit, but since that is neither part of the Neo-Keynesian aggregate model nor the babysitting coop story, Krugman simply omits it.  And it can’t be denied that the babysitting coop did appear to get out of its impasse by printing more coupons.

However, Krugman is guilty of a significant omission when he claims that Fed inflation – cranking up the printing presses – worked spectacularly in ending the 1981-1982 recession.  And what he omits is that one of the chief causes of the recession was the Fed’s need to slam on the brakes due to the rampant inflation of the 1970s, inflation that completely failed to cure the high rates of unemployment as it was supposed to according to conventional Neo-Keynesian economic theory.  In fact, it was this failure that led to the widespread rejection of Neo-Keynesianism and the adoption of Milton Friedman’s monetarist spin on it.

Also, when Krugman claims that the Fed was cranking up the money presses in 1983, he omits to mention that throughout that year, which more than covers his “few months” the interest rate never fell below 10.5 percent, which is higher than it was at any time after November 1978!  Somehow, we’re supposed to believe that observably tighter monetary policy amounts to cranking up the money presses!

That being said, the money supply did observably begin increasing in 1983.  From mid-1982 to mid-1983, M2 rose $228 billion.  However, L1, total credit, grew $598 billion over the same period.

Now, Krugman admits that tripling the monetary base has not succeeded in moving the economy out of depression.  If the true lesson of the spring 1983 expansion is that credit, and not money supply is the issue, then we can assume that the current dearth of economic growth should be correlated with a similar lack of growth in Z1.

As it happens, that is precisely what we see.  Z1 has been very nearly flat since 2008 and is currently $5 trillion lower than its 60-year historical rate of growth would predict.  So, the basic foundation for Krugman’s case is not only incomplete and historically inaccurate, but flawed in precisely the way that those familiar with the Neo-Keynesian model would expect.

End this depression I

I’m going to take a slightly different approach to reviewing Paul Krugman’s latest book, End This Depression Now!.  Ever since writing TIA, I have found it frustrating to read a book, accurately summarize the arguments it contains, critique those arguments, and then find myself addressing various complaints about my summaries and critiques from those who readily admit they have not read the book.  This is particularly annoying because the percentage of people who actually bother to read a book appears to be a small fraction of those who are interested in discussing its contents and its implications.

So, instead of writing a general review and critiquing the summarized arguments, what I’m going to with this book is systematically highlight the 16 sections that I bookmarked and identify the specific claims being made as well as any fundamental flaws I believe are thereby revealed.  This approach should make it easier for people to understand exactly what Krugman has written and reduce any derailing of the discussion on the basis of the supposed inaccuracy of my summaries.  One could, if one liked, also consider this a 101 level course on Krugmanomics.

In Chapter Two, Depression Economics, Krugman explains his thesis:

“The central message of all this work is that this doesn’t have to be happening. In that same essay Keynes declared that the economy was suffering from “magneto trouble,” an old-­fashioned term for problems with a car’s electrical system. A more modern and arguably more accurate analogy might be that we’ve suffered a software crash. Either way, the point is that the problem isn’t with the economic engine, which is as powerful as ever. Instead, we’re talking about what is basically a technical problem, a problem of organization and coordination—a “colossal muddle,” as Keynes put it. Solve this technical problem, and the economy will roar back to life.

Now, many people find this message fundamentally implausible, even offensive. It seems only natural to suppose that large problems must have large causes, that mass unemployment must be the result of something deeper than a mere muddle. That’s why Keynes used his magneto analogy. We all know that sometimes a $100 battery replacement is all it takes to get a stalled $30,000 car back on the road, and he hoped to convince readers that a similar disproportion between cause and effect can apply to depressions. But this point was and is hard for many people, including those who believe themselves well-informed, to accept….

What I hope to do in this chapter is convince you that we do, in fact, have magneto trouble. The sources of our suffering are relatively trivial in the scheme of things, and could be fixed quickly and fairly easily if enough people in positions of power understood the realities. Moreover, for the great majority of people the process of fixing the economy would not be painful and involve sacrifices; on the contrary, ending this depression would be a feel-good experience for almost everyone except those who are politically, emotionally, and professionally invested in wrongheaded economic doctrines….

Think of it this way: suppose that your husband has, for whatever reason, refused to maintain the family car’s electrical system over the years. Now the car won’t start, but he refuses even to consider replacing the battery, in part because that would mean admitting that he was wrong before, and he insists instead that the family must learn to walk and take buses. Clearly, you have a problem, and it may even be an insoluble problem as far as you are concerned. But it’s a problem with your husband, not with the family car, which could and should be easily fixed.”

In summary, Krugman is aggressively asserting that the problems with the U.S. economy are trivial, technical, and easily solved by the economic equivalent of changing a car battery by people in positions of power.  He sees no serious structural economic problems stemming from the trade deficit, the demographic changes in the population, the educational system, the financial system, the shift to a service economy, or the record levels of public and private debt.  He also expects that the process of fixing it will be close to painless for nearly everyone in the country.  He does not, however, claim that it will be politically easy to solve the problem, in fact, the solution is a political one and primarily concerns overcoming those who are “invested in wrongheaded economic doctrines.”

Is everyone clear on this?  Does anyone see any reason to take exception to this summary or claim I am erecting a strawman?  I’ll also be interested to know your opinion of whether this approach is effective or not.

Krugmanocracy

Tim Geithner is going to end this depression now!

Treasury Secretary Timothy Geithner said Friday that Congress should
stop placing legal limits on the amount of money the government can
borrow and effectively lift the debt limit to infinity.  On Bloomberg TV, “Political Capital” host Al Hunt asked Geithner if he believes “we ought to just eliminate the debt ceiling.”

“Oh, absolutely,” Geithner said.

Not satisfied with this intellectual victory, Paul Krugman celebrated by calling for a 91 percent tax rate.  The amazing thing is that wasn’t even the craziest thing in his column.  He also asserted: “We are, morally, a much better nation than we were.”

His claim puts me in mind of the Book of Isaiah. “Woe to those who call evil good and good evil, who put darkness for
light and light for darkness, who put bitter for sweet and sweet for
bitter.”

Bitchslapping the anklebiter

Tad tees himself up:

@Vox Day “They can’t assert that debt doesn’t matter at all anymore…”

No, they can’t assert this. But, then they never did.  Burn that straw man down!!! 

It’s hard for me to clearly communicate how much I despise anklebiting little bitches like Tad.  They’re as stupid as they are ignorant, and yet they somehow manage to act smug whenever they are “correcting” their intellectual superiors.  The fact that such a cretin is willing to publicly assert I am attacking a straw man when I am doing nothing more than citing literally TEXTBOOK mainstream economics would alone be enough to make me reject democracy.  Three points:

1)  Debt isn’t even listed in the extensive 13-page index of the most important textbook in economic history, Paul Samuelson’s Economics.  622 pages and Samuelson devotes all of a paragraph to it, mostly to explain why it’s irrelevant.

2)  In his latest book, Paul Krugman openly argues that debt is irrelevant for any nation with a central bank that borrows in its own currency because it cannot default, and since the nation cannot default, it can eventually grow its way out of debt through a combination of time, GDP expansion, and inflation.  He writes: “Governments depend on being able to roll over most of this debt, in effect selling new bonds to pay off old ones. If for some reason investors should refuse to buy new bonds, even a basically solvent government could be forced into default.  Could this happen to the United States? Actually, no—because the Federal Reserve could and would step in and buy federal debt, in effect printing money to pay the government’s bills. Nor could it happen to Britain, or Japan, or any country that borrows in its own currency and has its own central bank.”

3)  In his landmark Neo-Keynesian textbook, Paul Samuelson expressly pointed out that domestic debt did not matter in the aggregate.  He wrote: “The interest on an internal debt is paid by Americans to Americans; there is no direct loss of goods and services. When interest on the debt is paid out of taxation, there is no direct loss of disposable income; Paul receives what Peter loses, and sometimes – but only sometimes – Paul and Peter are one and the same person…. In the future, some of our grandchildren will be giving up goods and services to other grandchildren. That is the nub of the matter. The only way we can impose a direct burden on the future nation as a whole is by incurring an external debt or by passing along less capital equipment to posterity.”

So, the Neo-Keynesians have ALWAYS argued that debt doesn’t matter in the aggregate so long as it is internal.  This is a fundamental aspect of their core view of economics, and this is why they don’t understand bubbles as well as why their solution to economic depression always involves more debt and more spending.

I’ve noticed that as a general rule, if someone uses the phrase “straw man”, they are almost invariably the same sort of mindless yapping idiot that used to make a habit of pointing out “correlation is not causation” and claiming “extraordinary claims require extraordinary evidence”.  It’s almost as if there is someone programming these morons to say demonstrably ludicrous things and inflicting them upon the public en masse.

UPDATE: Since Tad has somehow managed to conclude that economists explicitly arguing that debt doesn’t matter is evidence that they believe it does, in fact, matter, let’s add a few more Krugman quotes from “the document where this assertion was made by, say, Krugman”, namely, his latest book,  End This Depression Now!  Tad clearly doesn’t understand that the entire point of Krugman’s book is not only to convince readers that debt doesn’t matter, but to convince them that adding massive quantities of government debt to the existing debt is the actual and only solution to the speedy end of the current depression.  Here is Krugman writing in the chapter entitled “But What About the Deficit?”

“Where the harm done by lack of jobs is real and terrible, the harm done by deficits to a nation like America in its current situation is, for the most part, hypothetical….

The key thing to bear in mind is that the $5 trillion or so in debt America has run up since the crisis began, and the trillions more we’ll surely run up before this economic siege is over, won’t have to be paid off quickly, or indeed at all. In fact, it won’t be a tragedy if the debt actually continues to grow, as long as it grows more slowly than the sum of inflation and economic growth….  

Now let’s consider what all this implies for the future burden of the debt we’re building up now. We won’t ever have to pay off the debt; all we’ll have to do is pay enough of the interest on the debt so that the debt grows significantly more slowly than the economy.”

End this depression now!

Paul Krugman has the solution to the economic crisis in his book published earlier this year.  You’ll never guess what it is!

Spend Now, Pay Later

The basic situation of the U.S. economy remains now what it has been since 2008: the private sector isn’t willing to spend enough to make use of our full productive capacity and, therefore, to employ the millions of Americans who want to work but can’t find jobs. The most direct way to close that gap is for the government to spend where the private sector won’t.
There are three common objections to any such proposal:

1.    Experience shows that fiscal stimulus doesn’t work.
2.    Bigger deficits would undermine confidence.
3.    There aren’t enough good projects to spend on.

I’ve dealt with the first two objections earlier in this book; let me briefly summarize the arguments again, then turn to the third.

As I explained in chapter 7, the Obama stimulus didn’t fail; it simply fell short of what was required to offset the huge private-sector pullback that was already under way before the stimulus kicked in. Continuing high unemployment was not just predictable but predicted.

The real evidence we should be considering here is the rapidly growing body of economic research on the effects of changes in government spending on output and employment—a body of research that relies both on “natural experiments” such as wars and defense buildups and on careful study of the historical record to identify major changes in fiscal policy. The postscript to this book summarizes some of the major contributions to this research. What the work says, clearly and overwhelmingly, is that changes in government spending move output and employment in the same direction: spend more, and both real GDP and employment will rise; spend less, and both real GDP and employment will fall.

What about confidence? As I explained in chapter 8, there’s no reason to believe that even a substantial stimulus would undermine the willingness of investors to buy U.S. bonds. In fact, bond market confidence might even rise on the prospect of faster growth. Meanwhile, both consumer and business confidence would actually rise if policy turned to boosting the real economy.

One would probably have to read this book to believe the astonishing simplicity of his Neo-Keynesian approach.  I could have written it in in a single page.  Actually, I could have written in in a single sentence: More public debt and more government spending is the solution to this economic depression because government spending is capable of creating the jobs necessary to produce economic growth, while the resulting public debt is not a problem because any country with its own central bank can issue an infinite amount of it without any long-term costs.

I think what we are seeing here is the beginning of the death throes of Neo-Keynesian economics.  They can’t assert that debt doesn’t matter at all anymore, since the conventional Samuelsonian argument was blown away by the growth of foreign debt and the financial crisis of 2008, so now Krugman and company have shifted to arguing that a certain and specific type of debt can be amassed infinitely.  Time will soon prove this move of the goalposts to be false as well.

There is a lot to question in Krugman’s book and I will be addressing those questions over the next few weeks as I have 16 sections bookmarked.  But this is the essential summary.

Mailvox: The silence of the Keynesians

BK asks why Paul Krugman and the Neo-Keynesians aren’t celebrating all those windows broken by Tropical Storm Sandy:

If, as per the NeoKeynesians, the government action in economy like
building some bridges somewhere is good for economy, then don’t you
think Sandy has given the government the right opportunity to improve
the economy- by rebuilding things. ( I guess they don’t care about the
broken window, do they.)  Why is it that Krugman and Co are not declaring
publicly that “Sandy is good for America”, then? Are they afraid that
such a statement will not be good for Obama campaign? That would be
double standards then – keep quiet about your theory when it is
unpopular, speak it out and implement it other times to gain popularity.
In that case, why isn’t the Romney people exposing the double standards
of these people to gain advantage?

Krugman and company are (mostly) keeping quiet on the tropical storm stimulation being provided to the US economy because it is a concept too manifestly absurd to be accepted by the general public when the public is actually dealing with the concrete reality of the devastation.  Keynesianism is the sort of gassy theoretical model that only holds up as long as it isn’t held accountable by events, which is why you never see Keynesians talking about economic history or even showing any sign that they are familiar with economic history.

As for the Romney supporters, they aren’t exposing the double-standards of Krugman and other Obama supporters because they, too, are Neo-Keynesians.  They are the flavor known as monetarists, heavily influenced by the Keynesian reformist Milton Friedman, but as Steve Keen and other economists of left and right have pointed out, they’re all operating within the same conceptual neoclassical framework, speaking the same Samuelsonian language.

VDH describes Krugman and his kind

VDH on the naive and ignorant mindset of the left-liberal elite

In the elite liberal mind, there is instead a sort of progressive Big
Rock Candy Mountain. Gasoline comes right out of the ground through the
nozzle into the car. Redwood 2x4s sprout from the ground like trees.
Apples fall like hail from the sky; stainless steel refrigerator doors
are mined inches from the surface. Tap water comes from some enormous
cistern that traps rain water.  Finished granite counter tops
materialize on the show room floor. Why, then, would we need Neanderthal
things like federal gas and oil leases, icky dams and canals, yucky
power plants, and gross chain saws — and especially those who would dare
make and use them? 

For some, especially those who are well-educated and well-spoken, a
sort of irrational furor at “the system” governs their political
make-up. Why don’t degrees and vocabulary always translate into big
money? Why does sophisticated pontification at Starbucks earn less than
mindlessly doing accounting behind a desk? We saw this tension with
Michelle Obama who, prior to 2009, did not quite have enough capital to
get to Aspen or Costa del Sol, and thereby, despite the huge
power-couple salaries, Chicago mansion, and career titles, felt that
others had far too much more than the Obamas. “Never been proud,”
“downright mean country,” “raise the bar,” etc., followed, as
expressions of yuppie angst. The more one gets, the more one believes he
should get even more, and the angrier he gets that another — less
charismatic, less well-read, less well-spoken — always seems to get
more. 

So do not discount the envy of the sophisticated elite. The unread
coal plant manager, the crass car dealer, or the clueless mind who farms
1000 acres of almonds should not make more than the sociology
professor, the kindergarten teacher, the writer, the artist, or the
foundation officer. What sort of system would allow the dense and easily
fooled to become better compensated (and all for what — for superfluous
jet skis and snowmobiles?) than the anguished musician or tortured-soul
artist, who gives so much to us and receives so much less in return?
What a sick country — when someone who brings chain saws into the Sierra
would make more than a UC Berkeley professor who would stop them.

And lest you think he exaggerates about the inability of the left-liberal to understand concepts as basic as where things come from, consider this recent offering from Paul Krugman, among the most elite members of the left-liberal community.

Both Dean Baker and Josh Bivens weigh in Robert Samuelson’s outburst at the New York Times for saying that the government can too create jobs. (He went so far as to call it “flat-earth” thinking). Sadly, Samuelson’s attitude is widely shared — even, at least rhetorically, by Barack Obama.

So let me not focus on Samuelson’s piece so much as on the general proposition. What can it possibly mean to say that only the private sector can create jobs?

It could mean that government jobs aren’t “real” jobs — presumably that they don’t supply something of value to society. Samuelson disavows that position, I think — and rightly so. After all, the bulk of government workers are in education, protective services, and health. Do you really want to say that schoolteachers, firefighters, and nurses provide nothing of value?

What Samuelson is saying, what hundreds of economists have recognized for literally centuries, is that schoolteachers, firefighters and nurses PRODUCE nothing of value.  This should be obvious, because none of them PRODUCE anything at all.  Think about it.  Suppose that everyone was either a schoolteacher, a firefighter, or a nurse.  How much wealth would be collectively produced by them?  Absolutely nothing.

Schoolteachers, firefighters, and nurses are all societal luxury goods.  They are costs, at most they may allow for the leveraging and development of more efficient productive laborers, but in themselves, they produce absolutely nothing.  Their productive value is zero.  This is something that can be easily observed by anyone who has ever seen someone teaching, firefighting, or nursing.  And yet, the most elite of the elite left-liberals genuinely cannot grasp this.  Nor is he the only one, as Baker and Bivens demonstrate.  Samuelson is too kind when he mocks them as flat-earthers.  At least the flat earthers can reasonably observe that the earth looks flat from their vantage point.

Hair of the dog

Another green shoot sighting!

For the first time since the Great Recession hit, American households
are taking on more debt than they are shedding, an epochal shift that
might augur a more resilient recovery.

For two of the last three quarters, American households’ total outstanding borrowing on things like credit cards, mortgages and auto loans has increased after falling for 14 consecutive quarters before then. Some economists even see an end to the long, hard process of deleveraging — as they refer to the cutting of debt relative to income or the nation’s economic output. That process, they say, has been a central reason for the extraordinary sluggishness of the recovery.

This increase in household debt is a sign of desperation, not recovery.  There are two times when households increase debt, when things are going well and when things are going very bad.  It defies credibility to think that household finances have improved when unemployment remains historically high and food stamp usage is at all-time highs.

To me, the key indicator of the next stage of the economic collapse may be college loan debt.  It is the only debt sector that has remained strong and grown since 2008.  Graduates who can’t find work have returned to school with the objective of improving their employment prospects and they are going more deeply into debt in order to do so.  This is the last gasp of the education bubble which Instapundit and others have been warning for the last three years.  Once awareness of the fact that more academic credentials do not ensure employment, only a deeper debt hole, begins to sink in with parents and students, we can expect to see a dramatic decline in education-related borrowing.

Note this section in particular: “Americans have also improved their personal balance sheets by slashing their outstanding credit card debt to $855 billion today from more than $1 trillion in 2008, according to Federal Reserve data. But student debt has continued its inexorable march higher, a “worrisome” trend that economists say could stop young workers from starting new households or could eat into their spending on other goods and services.”

It is interesting to see that the idea there is a relationship between debt growth and economic growth is finally percolating into the mainstream economic coverage.  Back in 2002, when I first publicly warned about the potential effects of the housing bubble on the financial system, almost no one understood what I was talking about.  Perhaps in another 10 years, it will finally be acknowledged that there hasn’t been any economic growth since 2001 as all of it has been nothing more than an artifact of expanding debt.

A portrait in irony

Our favorite “Nobel Prize”-winning economist, Paul Krugman, laments Mitt Romney’s successful stealing from the Democratic playbook:

Mitt Romney has been barnstorming the country, telling voters that he
has a five-point plan to restore prosperity. And some voters, alas, seem
to believe what he’s saying. So President Obama has now responded with
his own plan, a little blue booklet containing 27 policy proposals. How
do these two plans stack up?

Well, as I’ve said before, Mr. Romney’s “plan” is a sham. It’s a list of
things he claims will happen, with no description of the policies he
would follow to make those things happen. “We will cut the deficit and
put America on track to a balanced budget,” he declares, but he refuses
to specify which tax loopholes he would close to offset his $5 trillion
in tax cuts. 
Actually, if describing what you want to see happen without providing
any specific policies to get us there constitutes a “plan,” I can easily
come up with a one-point plan that trumps Mr. Romney any day. Here it
is: Every American will have a good job with good wages. Also, a
blissfully happy marriage. And a pony. 

So Mr. Romney is faking it. His real plan seems to be to foster economic
recovery through magic, inspiring business confidence through his
personal awesomeness.

Translation: Romney has no economic plan for economic recovery except for appealing to the pagan economic gods of the animal spirits.  Which, if you will recall from your reading of the General Theory, is pure Keynesian economics.  I find it absolutely hilarious that the great Keynesian champion is directly criticizing the very heart of the economic theory that forms the basis for his own Neo-Keynesian synthetic approach.

As an added bonus, he damns the man he is attempting to defend by faint praise.  He writes: “Mr. Obama’s booklet comes a lot closer to being an actual plan. Where
Mr. Romney says he’ll achieve energy independence, never mind how, Mr.
Obama calls for concrete steps like raising fuel efficiency standards.”

Translation: it’s not an actual plan, but it is “a lot closer” to being one.  But one either has a plan or one does not; how is “raising fuel efficiency standards” any less fake than “cutting the deficit”?  It’s not any more specific, it’s merely a smaller generality.

The reality is that neither presidential candidate has a plan that goes beyond “print and pray”.  Neither Romney or Obama can do anything to foster economic recovery, as they have outsourced that responsibility to Helicopter Ben Bernanke, who appears grimly determined to demonstrate that no matter how many times it is proven that one cannot inflate one’s way to prosperity, if one has a hammer, the problem MUST be a nail.