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I liked Ben Bernake but he essentially admits that even though the purpose of Quantitative Easing (QE) was to help the little guy on main street it really only
by SCAQTony 11y ago
I liked Ben Bernake but he essentially admits that even though the purpose of Quantitative Easing (QE) was to help the little guy on main street it really only trickled down to corporations on Wall St.
Instead of buying back bonds and bailing out banks, what if the Fed would have paid the monthly mortgages of home owning citizens for a year-or-two or paid them as much as they have put into purchasing bonds via QE?
Benefitting the little guy by paying the banks their respective mortgage payments would have kept both parties afloat (The banks and the home owner) and would have been a better trickle down policy?
Then again, this is hindsight. YMMV.
- dragonwriter 11y agoThe Fed's policy options are, by design, constrained. Paying citizen's mortgages I don't think is within them. Most things outside the realm of the Fed's usual mechanisms require Congress to act (either to directly create the policy or to expand the Fed's mandate so that the Fed can execute the policy.) It's not QE by the Fed that should have been replaced by consumer bailouts, but the congressionally authorized bank bailouts from the Treasury; that fiscal action might have relieved the pressure for the Fed pushing hard on its monetary policy levers for so long.
- noobermin 11y agoThat was one of the main take aways of the article I found, that such powers (fiscal policy and tax policy and spending) lie with law makers, not the fed.
- nextweek2 11y agoDidn't George W Bush try giving $300 to every tax payer? What happened to that scheme?
- pil4rin 11y agoPlaystation sales went through the roof that year.
- ZenoArrow 11y ago> "Then again, this is hindsight. YMMV." I swear I remember people calling for the same thing around the time of the bailouts. If the bank bailouts weren't rushed through unnecessarily then a "people's bailout" could've definitely happened.