"Nature smiles at the union of freedom and equality in our utopias. For freedom and equality are sworn enemies, and when one prevails the other dies. Leave men free, and their natural inequalities will multiply almost geometrically, as in England and America in the nineteenth century under laissez-faire. To check the growth of inequality, liberty must be sacrificed, as in Russia after 1917."
- Will and Ariel Durant, "The Lessons of History"
Former Federal Reserve Chairman Ben Bernanke is writing a book in which he doubtless will explain the monetary policy crafted to combat the worst financial crisis faced by this country since the Great Depression of the 1930s.
He has left to his successor, Janet Yellen, to explain in her memoirs how she handled the seemingly intractable inflationary pressures she inherited when Bernanke skedaddled out of town.
This will not be easy.
Thus far, of course, federal obfuscation has papered over the seriousness of the situation created by near-zero interest rates and "quantitative easing" policies that, in essence, enabled the Obama administration to run unprecedented budget deficits for six consecutive years, deficits that cumulatively added more than $6 trillion to an already monstrous public debt.
In the fantasy world of Washington economic analysis, inflation is now not a problem. Officially it languishes below the Fed's "target" of 2 percent.
Yeah. Tell that to anyone in the lower and middle classes who does the grocery shopping, pays the electric and gas bill and puts gasoline in the family car.
Oops! My mistake. Increases in the cost of food and energy are not used by the government when computing the core inflation rate.
Now, whoever dreamed that up?
Someone, I suppose, for whom the cost of food and energy consumes a far smaller share of earned income than that paid by middle and lower class American workers.
The federal government (the Agriculture Department) forecasts an increase of 3.5 percent in food prices this year.
I do the grocery shopping in my house, and based on what I've seen that estimate seems extraordinarily low. Pie-in-the-sky low, actually.
And energy? The technological miracle of fracking has placed our country on the cusp of energy independence. Has anyone seen this reflected in prices at the pump? Or in the cost of lighting, heating, and cooling a house?
What's going on here? Has someone in government done away with the law of supply and demand in the energy sector, too?
Another thing that riles me up - those near-zero interest rates.
Who have they helped? Bankers, I suppose. The stock market, certainly. Holders of currency desperately seek returns to keep them abreast with inflation.
Beware the next correction, though. It could well be a humdinger.
Who has been hurt by near-zero interest rates?
Let's start with the unsophisticated elderly who hoped a nest egg earning reasonable interest would see them through a comfortable retirement. What they've seen instead is the steady erosion in purchasing power of what they had stashed in "safe" money market or CD accounts that pay next to nothing - currently one tenth of one percent.
The wealthy, the top one percent, are doing very well in this Obama economy.
It's the middle class and the working poor who are being savaged. It should be abundantly clear that this is so, and that it is only going to get worse before it gets better.
You simply cannot dump as much created-out-of-thin-air money into an economy as the Federal Reserve has done without steering that economy onto the rocks. And there are simply not enough life belts to go around when that happens.
It is long past time for the Yellen Fed to order "all back emergency full," and do the job it was created to do - protect the purchasing power of the dollar.
R.L. Schreadley is a former Post and Courier executive editor.
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