Perception v. Reality
Perception, per the NYT: Fed Leaves Key Rate Steady as It Worries About Growth
Reality: TSLF (Mar 11), PDCF (Mar 16), expanded acceptable collateral pool (multiple times, most recently Monday), loans to the parent from the subsidiaries to cover capital needs.*
And it may not be enough. (Of course it’s an AIG link.)
There’s more than one way to manage monetary policy. And Ben Bernanke is using all of the ones that will not increase aggregate consumer spending.
At least that’s the optimistic view. UPDATE: Brad DeLong appears to disagree. UPDATE II: But Mark Thoma is thinking the same way I did (though he’s much better at the number-sense game).
*I note, strictly for the record, that since this was a New York State, not a Federal, initiative, it may well become illegal under the current Administration’s proposed guidelines for the SEC. If there’s an intelligent reporter out there, maybe they should ask the campaigns whether they oppose Governor Patterson’s actions?