I met elderly people victimized three times over. First they lost home equity to refis or prime-to-subprime switcheroos. Next, their pension funds were wiped out by overinvestment in junk mortgages. The next insult was paying taxes to bail out the companiesresponsible. Finally, after finance sharks had taken almost everything from retired toll-takers and teachers and firefighters who’d set aside savings into retirement portfolios and homes, they were robbed a fourth time, this time by intellectuals.
A new form of “progressive” economist, exemplified by Federal Reserve chief Ben Bernanke decided to try letting America drink itself sober. Helicopter Ben zeroed out interest rates and pumped trillions in printed money into the economy, which punished old savers and rewarded young Wall Street gamblers (who often also looked outside America in search of high yields, resulting in mass capital flight, which was even more awesome). In his pompous The Courage to Act Bernanke conceded that his policies would slash rates for six-month CDs of the type often used by “retirees and other savers” by a factor of ten, from 5% to about 1/2%, but he was doing it to “promote economic recovery.” Besides, he said, “retirees would want a healthier job market as well, if only to prevent their twenty- and thirty-something children from moving back home.”