From Ben Bernanke, at the time Chairman of the Federal Reserve, “Remarks by Governor Ben S. Bernanke at the Conference to Honor Milton Friedman, University of Chicago, Chicago, Illinois,” federalreserve.gov (2002-11-08), commenting to Milton Friedman’s public statement that the Great Depression was caused by the Federal Reserve Bank:
Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve System. I would like to say to Milton and Anna: Regarding the Great Depression. You’re right, we did it. We’re very sorry. But thanks to you, we won’t do it again.
Bernanke was wrong on both counts. The new Federal Reserve stoked the monetary fires and turned the 1920s into the Roaring Twenties (see America’s Great Depression, Murray N. Rothbard). The music stopped when the Fed began raising interest rates, but that should have led only to a recession. The Fed had little to do with turning that recession into the Great Depression by excessive monetary stringency, contrary to Friedman and Anna Schwartz’s thesis (see America’s Great Depression and The Great Deformation, David Stockman). Herber Hoover, Franklin Roosevelt and their brainless trusters can take the credit for that one.
However, the Fed’s quantitative easing and interest rate suppression policies have laid the groundwork for a Depression that will rival and probably surpass the Great Depression. So, to sum up SLL’s complete contradiction of Bernanke: the Federal Reserve did not cause the Great Depression, but its policies since the financial crisis will cause an even Greater Depression. Judging by the stream of articles on economic and financial deterioration around the globe, featured on SLL every day (and SLL culls those articles from a much broader universe), and noting their recent intensification, it looks like that Greater Depression has arrived.
Reblogged this on lisaandrews1968 and commented:
“… it looks like that Greater Depression has arrived.”