From “The Great Abdication,” Paul Krugman, NYT:
“Ben Bernanke…has warned in particular about the damage being done to America by the unprecedented level of long-term unemployment.
“So what does the Fed propose doing about the situation? Almost nothing. True, last week the Fed announced some actions that would supposedly boost the economy. But I think it’s fair to say that everyone at all familiar with the situation regards these actions as pathetically inadequate — the bare minimum the Fed could do to deflect accusations that it is doing nothing at all.
“Why won’t the Fed act? My guess is that it’s intimidated by those Congressional Republicans, that it’s afraid to do anything that might be seen as providing political aid to President Obama, that is, anything that might help the economy.
“None of this should be happening. As in 1931, Western nations have the resources they need to avoid catastrophe, and indeed to restore prosperity — and we have the added advantage of knowing much more than our great-grandparents did about how depressions happen and how to end them. But knowledge and resources do no good if those who possess them refuse to use them.
“And that’s what seems to be happening. The fundamentals of the world economy aren’t, in themselves, all that scary; it’s the universal abdication of responsibility that fills me, and many other economists, with a growing sense of dread.” Emphasis added.