Due to credible competition that has emerged among this year’s candidates for the Hubris in Monetary Policy Award, the Award Committee has announced that it is officially deadlocked.
The competition is centered on two candidates. Take, for instance, the submission by Federal Reserve Chairman Ben Bernanke, who provided remarkable testimony to the US House of Representatives’ Financial Services Committee last month. In it, he argued that the subprime crisis could be blamed, in part, on the Fed’s (and his own) effectiveness. It is not that Fed policies did not contribute to the situation, he said, but that long-term rates, made lower by low inflation expectations, played a greater role. FULL ARTICLE