Ben’s big GAP
is the difference between what he wants to do and what he can do. We waited all summer to hear if he had come to his senses. Sadly he has not. His years of research have shown him how to hold off a depression, not how to start a sound economy.
For me the reason is simple, a sound economy is based on sound fiscal principles. The supply side trickle down experiment, that started in the early 80’s, did not work. That leaves Congress and the Administration with the task of cleaning out the closet and enable something like Bowles-Simpson. At the same time an election looms and the possibility exists that a trickle down team may be elected to try it again. The people of this country need a wake up call.
As to markets, each one of Bernanke’s speeches brings a dream rally and then the markets settle back into reality.