One thing I noticed in the book was the thought that Ben Bernanke waited too long to engage monetary tools to aid recovery from the financial crisis of 2008. I remember that at the time, he was imploring Congress to do more fiscal stimulus, which would have been far more effective than any tools he had. I think he was afraid that if he s…
One thing I noticed in the book was the thought that Ben Bernanke waited too long to engage monetary tools to aid recovery from the financial crisis of 2008. I remember that at the time, he was imploring Congress to do more fiscal stimulus, which would have been far more effective than any tools he had. I think he was afraid that if he started using monetary tools, Republicans would have an excuse to delay or entirely block spending. In the end, the government did about half of what was needed, and because there weren't many creditworthy borrowers, the Fed's monetary tools were slow to work. They could put money into the banks, but not much was going out. The phrase at the time was "pushing on a rope."
One thing I noticed in the book was the thought that Ben Bernanke waited too long to engage monetary tools to aid recovery from the financial crisis of 2008. I remember that at the time, he was imploring Congress to do more fiscal stimulus, which would have been far more effective than any tools he had. I think he was afraid that if he started using monetary tools, Republicans would have an excuse to delay or entirely block spending. In the end, the government did about half of what was needed, and because there weren't many creditworthy borrowers, the Fed's monetary tools were slow to work. They could put money into the banks, but not much was going out. The phrase at the time was "pushing on a rope."