COMMENTARY WWW.THESTATE.COM ● THE STATE, COLUMBIA, ● WEDNESDAY, NOVEMBER 10, 2010 A9 The Fed’s doing it again ight years ago Ben Ber- and criticism. As a result, by of Japan’s relentless slide into plaining vociferously that the ing about runaway inflation Bernanke — clearly trying to nanke, already a gover- the time the actual policy corrosive deflation. Fed’s actions have weakened just around the corner. appease the inflationistas — E nor at the Federal Re- emerges, it’s watered down to Unfortunately, conven- the dollar. All I can say about They’re doing it again — and vowed not to change the Fed’s serve although not yet chair- such an extent that it’s almost tional monetary policy is no this line of criticism is that the they may already have suc- price target: “I have rejected man, spoke at a conference guaranteed to fail. longer available: The short- hypocrisy is so thick you could ceeded in emasculating the any notion that we are going honoring Milton Friedman. We’ve already seen this term interest rates the Fed cut it with a knife. Fed’s new policy. to try to raise inflation to a su- He closed his talk by happen with fiscal pol- normally targets are already After all, you have China, For the big concern about per-normal level in order to addressing Fried- icy: Fearing opposition close to zero. So the Fed is which is engaged in currency quantitative easing isn’t that it have effects on the economy.” man’s famous claim in Congress, the Oba- shifting from its usual policy manipulation on a scale un- will do too much; it is that it will And there goes the best that the Fed was re- ma administration of- of buying only short-term precedented in world history accomplish too little. Reason- hope that the Fed’s plan sponsible for the fered an inadequate debt, and is now buying long- — and hurting the rest of the able estimates suggest that the might actually work. Great Depression, be- plan, only to see the term debt — a policy general- world by doing so — attack- Fed’s new policy is unlikely to Think of it this way: Ber- cause it failed to do plan weakened further ly referred to as “quantitative ing America for trying to put reduce interest rates enough to nanke is getting the Obama what was necessary to in the Senate. In the easing.” (Why? Don’t ask.) its own house in order. You make more than a modest dent treatment, and making the save the economy. end, the small rise in There’s nothing outlandish have Germany, whose econo- in unemployment. The only Obama response. He’s facing “You’re right,” said federal spending was about this action. As Ber- my is kept afloat by a huge way the Fed might accomplish intense, knee-jerk opposition Bernanke, “we did it. Paul effectively offset by nanke tried to explain Satur- trade surplus, criticizing more is by changing expecta- to his efforts to rescue the We’re very sorry. But Krugman cuts at the state and lo- day, “This is just monetary America for running trade tions — specifically, by leading economy. In an effort to mute thanks to you, we New York Times cal level, so that there policy,” adding, “It will work deficits — then lashing out at people to believe that we will that criticism, he’s scaling won’t do it again.” was no real stimulus to or not work in much the same a policy that might, by weak- have somewhat above-normal back his plans in such a way Famous last words. the economy. way that ordinary, more con- ening the dollar, actually do inflation over the next few as to guarantee that they’ll For we are, in fact, do- Now the same thing ventional, familiar monetary something to reduce those years, which would reduce the fail. ing it again. is happening to monetary policy works.” deficits. incentive to sit on cash. And the almost 15 million It’s true that things aren’t policy. Yet the Pain Caucus — my As a practical matter, how- The idea that higher infla- unemployed American work- as bad as they were during The case for a more expan- term for those who have op- ever, this foreign criticism tion might help isn’t outland- ers, half of whom have been the worst of the Depression. sionary policy by the Fed is posed every effort to break doesn’t matter much. The ish; it has been raised by ma- jobless for 21 weeks or more, But that’s not saying much. overwhelming. Unemploy- out of our economic trap — is real damage is being done by ny economists, some regional will pay the price, as the And as in the 1930s, every ment is disastrously high, going wild. our domestic inflationistas — Fed presidents and the Inter- slump goes on and on. proposal to do something to while U.S. inflation data over This time, much of the noise the people who have spent ev- national Monetary Fund. But improve the situation is met the past few years almost per- is coming from foreign govern- ery step of our march toward in the same remarks in which E-mail Mr. Krugman at with a firestorm of opposition fectly match the early stages ments, many of which are com- Japan-style deflation warn- he defended his new policy, [email protected]. Abandoning Greene hurt Democrats n Nov. 2, Democrats publican opponent, was a Re- Greene, who agrees with the 2004 presidential race, con- gotten 37 percent without the lost every statewide publican plant. Clyburn, lev- unions. Progressives who sumer advocate extraordi- Democratic Party-sanctioned O and congressional eling ever-mutating slander- held their nose and voted for naire Ralph Nader. Nader defections. And if the Demo- race in South Carolina except ous charges that were shown John Kerry for president was far better than Gore or cratic Politburo had not at- in Congressman Jim Cly- to be false one by one, an- should have flocked to a man Kerry, but Democrats would tacked Greene, he could have burn’s gerrymandered dis- nounced that he would vote who won the primary without not support him, citing the gotten 42 percent, topping trict. But they defeated them- for a Mazie Ferguson. the help of corporations, need to beat the Republicans. O’Donnell’s total. selves. Consider Delaware The irony is that the only without the help of lobbyists, On Oct. 1, 2010, Michael That’s with no money. As and South Carolina. people thereby assisting the without the help of fat cats Moore implied he would vol- Greene reminded one of us After Christine O’Donnell Jonathan Donna J. Republicans were Clyburn, and all those people who con- unteer to make campaign ads when we watched election re- won the Republican Party’s David Farley Warren Fowler and other high-rank- trol our senators and for Democratic candidates, turns in his home, Obama on- Senate nomination in Dela- ing Democrats. congressmen. even those who would lose, ly won 45 percent of the ware over her party’s pre- Guest Columnists Greene did face a serious Frances Close, a longtime writing, “I don’t know a single South Carolina vote in 2008, ferred candidate, she re- charge, but he was and is in- Democrat, managed the person in Hollywood who with millions of dollars. ceived the blessings of the Re- nocent until proven guilty, a Green Party candidate’s cam- wouldn’t shoot and produce In short, Greene was no publican establishment, plus party and attacking the top of principle in the law that Mr. paign. She’s been a Democrat those spots for you for joke. His candidacy was $1 million. In South Carolina, the ticket. Fowler asked Clyburn ignores. her whole life, she says, but if FREE.” But Moore never re- killed by his own party. Democrat Alvin Greene, hav- Greene to withdraw, and kept Liberals mocked Greene she sees a better alternative to sponded to the Greene cam- The Democrats suffered a ing defeated the candidate his his name off the party Web because he speaks poorly on the Democratic nominee, paign’s requests for defeat without war, well party’s establishment figures site. TV, even though his platform why would she vote for the assistance. deserved. preferred, received $165 via Clyburn, the third-ranking was identical to, or more pro- Democrat? “I don’t think that Still, Alvin Greene won 28 Paypal during a typical Democrat in the U.S. House, gressive than, President Oba- makes sense,” Close argued. percent of the vote, with the Ms. Warren and Dr. Farley month that we managed his for whom Greene had voted ma’s. For example, Greene “I’m not a Democrat like Green Party getting 9 per- are members of the Warren campaign Web site. ever since he could vote, supports universal health that.” But she was a “Demo- cent. Since the Green Party Group, a Los Angeles S.C. Democratic Party called Greene’s victory “ele- care. Unions that endorsed Al crat like that” when Demo- won only 0.12 percent of the political consulting company chair Carol Fowler fired the phant dung,” implying that Gore, whose advocacy of free crats refused to vote for clear- vote in the 2008 presidential that advised Mr. Greene’s first shot, seceding from the Greene, not Greene’s pro-Re- trade gutted labor, opposed ly the best candidate in the elections, Greene might have campaign.

Expires November 13, 2010 STAJI8887-48-1