After the opinions of former U.S. Federal Reserve Chairs have been consistently valued by the investment community, after pioneering quantitative easing in the U.S., Ben Bernanke has decided to become the first retired top monetary policy maker to become a blogger.
After serving two terms as Chairman of the U.S. Federal Reserve, Ben Bernanke has taken to Twitter to announce his contribution to the age of the digital media revolution by launching his own blog.
Introducing my new blog on economics, finance, and sometimes baseball: http://t.co/xQ5qTeB9UP
— Ben Bernanke (@benbernanke) March 30, 2015
Bernanke’s predecessor, Alan Greenspan, has been frequently taking opportunities to speak about the political pressure on the Federal Reserve and the lack of complete independence when making policy decisions. In contrast, in his first blog post, Mr. Bernanke embarks on debunking some alleged myths about the role of the Fed in influencing long-term interest rates.
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The former chair of the U.S. Federal Reserve argues that the Fed is not the institution that keeps interest rates low. In his first post titled “Why are interest rates so low?” he explains the the Fed is only controlling the very short-term interest rates.
We’re very curious to know whether Mr. Bernanke forgot about the trillions of bond purchases that the Fed conducted as part of its monetary policy efforts. With those remaining on the balance sheet of the U.S. central bank, the former chairman doesn’t mention any effects of the bond purchases on long-term interest rates as if they have never happened.
The theme has been widely supported by another famous economics blogger, nobel laureate Paul Krugman. He raced to agree with what Ben Bernanke said in his own column in the NY Times, and highlighted his thesis about the need for Americans to spend their way out of tough times, arguing that savings is a bad thing. Nothing new under the sun there, a perpetual trade deficit and government and private debt spirals are nothing to worry about, according to Krugman.
Unfortunately, the former Fed chairman’s first shot at blogging makes for a sloppy attempt to provide interesting insights into his work, instead he’s merely weakly defending the posture of the Federal Reserve he left to Janet Yellen.
In his spare time Mr Bernanke has pledged to write about baseball, let’s hope he’s better at that rather than defending ultra-loose inequality inducing Fed policy.