Tuesday, June 23, 2009

Bernanke vs The WSJ editorial page

The Wall Street Journal editorial page has a "See we told you so" editorial and reprints comments from it and Bernanke from 2003.

But while the WSJ editorial page was right in its prediction that consumer price inflation would increase significantly from the low levels seen in 2003 (reavhing particularly high levels in 2005 and the summer of 2008), contrary to their assertion in today's editorial, they actually did not predict the housing bubble or warn that a housing bubble could result from the Fed's inflationary monetary policies. The word "housing" and bubble" weren't even mentioned in the editorial.

Thus while the WSJ editorial page was closer to the truth than Bernanke, they missed the most important argument against the Greenspan-Bernanke policies, namely that these policies would create the housing bubble.


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