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August 30, 2010

A lick of common sense...

Tony Gallardo
A week or so ago, Governor Chris Christie of New Jersey held a press conference to discuss a bungled decision by the U.S. Department of Education. In it, he asked; "Does anybody in Washington D.C. have a lick of common sense?" The video can be seen here, and the quote appears at minute 2:00 to minute 3:00.

This was a rhetorical question, but I will answer it anyway; nope. We are reminded of this pretty much on a daily basis, the latest example appearing in a Washington Post article on Saturday, August 28, 2010.

The headline is; "Bernanke pledges dramatic steps if economy worsens."

The article then proceeds to tell us the following:

  1. Bernanke pledged no particular policy, but spelled out some options.
  2. One option the Fed can no longer use is to lower short term interest rates to stimulate the economy, because they are already near zero.
  3. They could buy hundreds of billions of Treasury bonds and other securities, but that is an unconventional and untested alternative.
  4. They could cut the interest the Fed  pays on reserves banks hold, but the impact of that and other remaining tools the Fed has are hard to predict.
  5. In the case of bond purchases, it is not clear that purchasing even a trillion dollars or more would have the desired effect, because rates are already so low.
At the end of the article, Bernanke "fesses up" and tells us that he really can't do much, and that the real solution is the responsibility of economic policy makers (read; politicians like Obama, Reid, Pelosi, et al.)

So what do we really have here with this pledge to take bold and dramatic action? Nothing; it is thrown back in the laps of the people who created this mess in the first place. These are the very same people whose solution to everything is to spend more money.

The question remains; does anyone in Washington, D.C. have a lick of common sense?

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