Fed's Move Considered Coventional Monetary Policy
Federal Reserve Chairman Ben Bernanke stands behind the Fed's decision to purchase treasury bonds. He argues that despite critics, the move is just a "conventional monetary policy conducted with different tools." The article goes on to suggest that former Federal Reserve Chairman Alan Greenspan is partially to blame for the financial crisis that occurred. Suggesting that his laid back style of controlling monetary policy created the "perfect storm of financial disaster." I argue that the Fed's current move is the correct step to get the economy moving in the right direction, and that inflation should be a long-term issue rather than a short-term concern. Steps to stimulate the economy should be done incrementally, as to not over correct the problem and create some sort of super-inflation. I would also like to defend Alan Greenspan on his policy not being the cause of our financial crisis, but rather it was lending institutions' willingness to over lend to unqualified borrowers. Americans should have calculated what their financial abilities were prior to borrowing amounts of money that they were unable to pay back. Banks should have known better than to have extended credit on such ridiculous ideas as "stated income." We must simply sleep in the bed we made.