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Truth is, all this was done in the hope it would actually work. There’s a contingent of economic theorists out there who thought that bending the yield curve lower by having the Fed purchase longer-dated maturities would goose the economy. They probably still think that way and want QE3, and QE4, if necessary.

This has, unfortunately, put the Fed in possession of a far riskier portfolio of assets than they normally hold, which could come back to bite them (and us, as taxpayers) somewhere down the road.

That, plus the fact that it didn’t work, makes Bernanke one of the sorriest Fed chairmen since Arthur Burns gave us the inflationary 70’s. And if Bernanke’s not careful in how he unwinds the trillion dollars of excess reserves he’s provided the banking system under the two QE’s, he’ll be responsible for an inflation that will make Burns look good by comparison.

The problem as I understand it is the banks that got the money aren't loaning it out, at least not to small businesses in the US. A lot of them simply bought their own stock, as well as other stocks, causing the unrealistic rebound we've seen in the markets. Per recent reports including on Fox News last night, Obama has sent his henchmen to Wall Street to tell them to loosen up the purse strings on the money, but they all told him forget it, not while he's in office they're not. Which of course is resulting in a lot of demagoguery by the left against big business, to help Obama win the next election anyway. In other words, this problem isn't about to get any better till at least 2012, no matter how much more money is handed out interest free to banks. At least that's the perspective given to Main Street. As for me I'd like to see more State-owned banks, who may care a little more about their citizen's well being than how much money they can make on them, while having to compete with neighboring state banks on all sides.