Forget Obama and Congress; Bernanke Has Most Tools

Fed taking a big gamble
By Kevin Spak,  Newser Staff
Posted Dec 8, 2008 12:58 PM CST
Chairman Ben Bernanke speaks on housing and housing finance at the Federal Reserve in Washington, Dec. 4, 2008.   (AP Photo)
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(Newser) – Barack Obama’s economic team and its plans get the big headlines, but let’s not forget that Ben Bernanke remains the biggest mover in US economic policy, Robert Samuelson writes in the Washington Post. Bernanke has been inventing new economic tools at a pace never seen before at the Federal Reserve, in a naked attempt to jump-start the credit market.

So far, the Fed’s loans have easily exceeded $1 trillion, dwarfing the $335 billion from Treasury’s bailout—and that’s in addition to dropping its key interest rate to 1%. It’s a “vast and daring monetary experiment,” writes Samuelson. Bernanke is creating money out of thin air, which could someday translate into huge inflation. But if he’s too timid, the slump could grow worse.