When then-Federal Reserve Chairman Alan Greenspan artificially lowered interest rates in 2003 and 2004, it popped the housing bubble and allowed toxic subprime mortgages to poison the global economy. Since late 2008, when the recession became a reality for many people, the Federal Reserve dropped the interest rate from 2 percent to zero by the middle of 2009. Current Federal Reserve Chairman Ben S. Bernanke now thinks the economy will resurrect itself if interest rates are kept near zero.
What has risen and spread across our nation since 2008 is unemployment, foreclosures and business and personal bankruptcies. President Obama and the Democrats in Congress are reeling after Nov. 2. They fear the newly elected conservatives in Congress who will block their socialist agenda and fight the idea that quality of life only improves with redistribution of wealth.
Mr. Obama thinks following Mr. Bernanke’s promise makes him look good by stimulating our economy with zero interest rates and buying Treasury bonds from banks with the Federal Reserve’s pretend money - the “ex nihilo” banking strategy. In fact, Mr. Bernanke’s quick fix will only stimulate speculators, who will make the stock market temporarily shine its false, optimistic light over our scorched economic landscape.
HELEN LOGAN TACKETT