Why Helicopter Ben’s choppers are grounded
I’ve been spending a bit of time wondering why Ben Bernanke’s choppers are grounded. Why isn’t “Helicopter Ben” out there throwing bales of $100 bills out of helicopters over the inner cities and working class suburbs of our nation?
After all, Keynesian economics maintains that if you have slack resources in your economy, it’s because people don’t have enough money to buy all the output that the economy is capable of producing, and thus printing money is the correct thing to do. And Friedman’s monetarism pretty much says the same thing even more clearly — it was Milton Friedman, not Ben Bernanke, who originally proposed money drops as the solution to a down economy.
So why doesn’t Ben do it? Thinking on an article at Ranger’s place, and slotting in an additional piece of information — the Chinese ambassador begging Bernanke not to crank up the presses — and then it clicks: Money drops wouldn’t do a thing for employment inAmerica, because all the stuff we’d buy with that freshly dropped money comes from China. It’d do wonder for employment in China but would do fuck-all for employment in America.
In short, we’re more fucked than I thought. This also explains why the Chinese ambassador was begging Bernanke to not print money: We’re trading freshly-printed dollars for these Chinese goods, so we’re actually exporting our inflation to China as well as our jobs. And if Bernanke started doing money drops, it’d create a virtual typhoon of inflation — in China, not in America, because all those freshly printed dollars would end up in China, not in America.
In short: We are fucked, good and hard. De-industrialization and the transition to a “service” economy has serviced us, alright. Like a stallion services a mare, that is. If you ain’t waddling, it’s just a matter of time. Just sayin’.
This post originally appeared at Badtux the Snarky Penguin.