Firing up the printing presses

Ben Bernanke has recently been at great pains to claim that QE2 is not the same as printing money. Andy Harless is initially confused, but comes up with a technical explanation here of why he thinks Bernanke is basically right. But I think Harless is probably overthinking things here. I doubt Bernanke’s annoyed denials are all that motivated in the merits of whether or not the Fed is printing money. Rather, I think the most likely explanation is that he’s conscious of an elite consensus around the idea that printing money to solve economic problems is one of those things that only crazy third-world Marxist dictators do. Also, the corollary, which is that because it sometimes leads to hyperinflation when crazy third-world Marxist dictators do it, we’re in danger of hyperinflation when Ben Bernanke does it. (We’re not, of course, because the money supply of the largest economy on Earth is not the same as the money supply of, say, Peru. But the Washington CW crowd has never been particularly good at following this kind of nuance.)

Bernanke has been under lots of fire from the Ron Pauls of the world lately, and I imagine he’s not eager to also incur the wrath of the Very Serious People too.


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