Today’s WSJ has several good letters regarding Janet Yellen’s nomination to head the Fed. Here is one (excerpted) that is especially clear in stating the issues we face:
Extraordinarily easy money in the Obama era has been a critical component of the administration’s wealth-redistribution agenda, with borrowers favored by Mr. Obama benefiting from artificially low rates, while savers suffer. That wealth transfer from savers to borrowers may have been as potent as the aggregate redistribution effects of higher taxes on the rich and expanded federal entitlements. Without Federal Reserve complicity, Democrats never could have afforded to keep adding a trillion dollars a year to the nation’s debt.
History says that democracies always try to inflate their way out of economic doldrums first, as Japan is attempting to do now. Inflation is the ultimate wealth-distribution tool and government life preserver when all other Keynesian policies sputter. The left is delighted with Ms. Yellen, and Wall Street is happy. Inflation, if it ever comes, will arrive like a thief in the night—there are too many other thieves to worry about right now.
Glen Reeves
Washington
