If it doesn’t work, then try, try, and try again. Federal Reserve Chairman Ben Bernanke is taking this expression to heart with a third round of quantitative easing (QE3). Unfortunately, while Mr. Bernanke is spinning his wheels in the mud pit, average Americans are sinking ever deeper into it. As I explain in The Wall Street Journal, the redistributive nature of the Fed’s operations to keep interest rates low for large banks and financial institutions hurts small businesses and ordinary Americans.
Mr. Bernanke's description of QE3 as a "'Main Street' policy" is incorrect. The Fed distributes its newly created money by buying securities from large financial firms. These businesses receive the dollars before anyone else in the economy and thereby become relatively wealthier than those without their close political connections. Small businesses on Main Street get the new money last, if at all. As Mr. Bernanke has long complained, his bank buddies aren't lending the money he's making. Worse, food and energy prices continue to rise, which cut into lower-income budgets the most. QE3 is carefully designed to help Wall Street first and Main Street last. Matthew Melchiorre Competitive Enterprise Institute WashingtonMr. Bernanke has the kind of power over which Congress and the President drool. Without having to go through two houses of Congress or remain accountable to a constituency, the chairman and his board of governors single-handedly redistribute income in the manner described above and tax savings through manipulation of the interest rate. Where’s the accountability? It’s lost in the mud pit with two previous rounds of cheap money and the sinking American public.