See if you can disagree with the flawless logic of a cartoon video explaining Ben Bernanke and QE. It's so simple a child could understand it—maybe that's why it was made into a cartoon? (Excerpt provided by Malekanoms via YouTube as original creator, video at bottom)
"So why do they call it the quantitative easing? Why don't they just call it the printing money?"
"Because the printing money is the last refuge of failed economic empires and banana republics. And the Fed doesn't want to admit this is their only idea."
"So why do they want to print the money?"
"Because they say we have the deflation. And the deflation is very bad."
"What is the deflation?"
"The deflation is when prices of the things we buy go down."
"Isn't that good? Does't it mean the people can buy more of the stuff?"
"Yes, but the Fed said this is bad. Especially during the recession."
"So they think that during the recession when the people have less money to buy the stuff it is bad that the prices go down?"
"Yes, the Fed would rather have the inflation."
"So why does the Fed think we have the deflation?"
"Because the CPI said so."
"But aren't the food prices higher than a year ago?"
"Yes."
"Aren't the gas prices higher than a year ago?"
"Yes."
"Aren't the health care costs higher than a year ago?"
"Yes."
"Aren't tuition prices higher than a year ago?"
"Yes."
"Aren't the taxes higher than a year ago?"
"Yes."
"Aren't the subway fares higher than a year ago?"
"Yes."
"Aren't the stock prices higher than a year ago?"
"Yes."
"Aren't the bond prices higher than a year ago?"
"Yes."
"So what is deflating right now?"
"The only thing deflating that I can see is the Fed's credibility."
"Did they have a lot of credibility to start with?"
"No."
"Why not?"
"Because the Fed has been wrong about every major economic development in the past 20 years."
"You mean, they didn't see the internet stock bubble?"
"No. In fact they helped fuel the internet stock bubble."
"And they didn't see the housing bubble?"
"No. In fact, they helped cause the housing bubble."
"And they didn't see the subprime crisis?"
"No. In fact, they told us subprime problems were contained right before the s--t hit the fan and the Lehman went bankrupt."
"So has the Fed ever been right about anything?"
"Let me see if I can think of anything....(long pause)....no, nothing."
"Who runs the Fed?"
"The Fed is run by the Ben Bernank."
"Does the Ben Bernank have a lot of business experience?"
"No. The Ben Bernank has no business experience."
"Does the Ben Bernank have a lot of policy experience?"
"No. The Ben Bernank has no policy experience."
"Has the Ben Bernank ever run in an election?"
"No. The Ben Bernank has never run in an election."
"So what qualifies him to run the Fed?"
"I don't know. Maybe the fact that he has a nice beard."
"But my plumber also has a nice beard and I would not trust him to play god with the economy."
"No, although when you call the plumber to fix something that is broken they usually fix it, not break it more."
"This is true, the plumber is clearly smarter than the Ben Bernank."
"Well, that is why he became a plumber and not an economist."
Watch the video below to continue:
Source: Malekanoms (YouTube user)
