Double Dip and MSM Negligence

More and more economists are starting to talk about the almost certainly of a double dip recession. Here's just another example.

It has been said that if one laid all the world's economists end to end, they wouldn't reach a conclusion. Even so, a surprisingly large number of economists now agree that then-Federal Reserve Chairman Alan Greenspan made a tragic mistake. After the dot-com bubble burst in 2000, Greenspan opened the monetary floodgates.

Specifically, Greenspan allowed the "monetary base" to increase 22% from June 2000 through June 2003. The monetary base, also called "high-powered money," is the base upon which bank loans are pyramided, expanding the total amount of money held by the public.

During the same three-year period, Greenspan cut the federal funds rate -- the interest rate commercial banks charge each other for overnight loans -- from 6.5% down to 1%, the lowest federal funds rate in more than 40 years.

The rationale for Greenspan's easy-credit policy was to provide a "soft landing" for the economy in the wake of the dot-com crash and Sept. 11 attacks. And for a while, it seemed he had succeeded. People marveled that housing prices continued to rise, even amidst the recession of 2001. Indeed, people referred to Greenspan as "the Maestro."

In retrospect, economists across the political spectrum recognize the role Greenspan's Fed played in fueling the housing bubble. The more cynical analysts argue that Greenspan's policies weren't "easy" at all and merely postponed the inevitable day of reckoning for the economy. Rather than gritting its teeth and suffering through the necessary adjustments in the early 2000s, the nation got an injection of artificial credit that masked the underlying problems with a euphoric boom.

The housing market eventually collapsed, as all bubbles do. At this point, Ben Bernanke was at the helm of the Fed. Unfortunately, he got his policies out of Greenspan's playbook, except Bernanke doubled down.

Rather than pushing short-term interest rates down to 1% as Greenspan did, Bernanke has pushed them down to almost zero percent. And in contrast to Greenspan's 22% increase in the monetary base during a three-year period, Bernanke increased it by 94% in one year.

The unprecedented monetary stimulus from the Fed, in conjunction with the massive deficits of the federal government, did succeed in partially re-flating the stock market and stabilizing home prices. Time magazine named Bernanke its 2009 Person of the Year, and Obama administration officials are taking credit for nipping the Great Recession in the bud. Yet the parallels with the Greenspan episode are clear.

Only a socialist, or a member of the MSM (but I repeat myself), could take a look at the economic mess we are in and see a recovery happening. Fifteen-plus million unemployed, foreclosures at a record pace, businesses afraid to hire with this punishing regulatory environment all make it clear that we are not in a solid recovery. Normal recoveries from recessions show economic growth of 7% or more and we have seen nothing like that. But the MSM keeps shilling for the Democrats and spinning away.

Remember when they Obama administration said the economy would recover around the second half of 2009? Then they said early 2010? And that the stimulus bill worked? Now they are saying things like the stimulus bill was too small and blaming the opposition for their own decisions. And the MSM never questions them about this.

Remember, when the Democrats took control of Congress the unemployment rate was at about 4.7% and the Dow was nearing 14,000. But after four years of Democrat rule we are in a downturn that rivals the Great Depression. And the MSM still covers for the left and their socialist agenda.

I mean, the other day CBS's Bob Schieffer tried to excuse his neglect of the New Black Panther voter intimidation story to his not knowing about it due to being on vacation. Oh please, Bob. You have no staff to stay on top of things? Do you really expect us to believe you do your own research and writing? That they had no internet link where you went on vacation? I went to Ireland for a month a couple years ago and every day was able to keep in touch with what was going on around the world. Please Bob, you are embarrassing yourself. No, the point is, you did not report on it because you have no problem with that story, being that you are a hard left shill. If it had been a group of skinheads out in front of that polling place you would have reported it 24/7, as you should have in either case.