Thursday, July 01, 2010

Helicopter Drop

Bernanke could have sent money from the Fed's magic money machine in all kinds of ways. They could have paid down mortgages. They could have put money in my bank account. They could have given it to state governments. What they did was prop up a failed banking system, and the worst failures of the failed banking system, under the premise that capital misallocating financial intermediaries were necessary for a stable economy.

It's one way to do things.