Nor is any of the above surprising in the least. Banks wrote off $1.8 trillion in bad debts and loan losses last year, the corporate paper market ran off another quarter of a trillion, as did the mortgage agencies. All the funds the Fed added to the banking system barely sufficed to keep consumer prices broadly stable, and if they had done nothing those prices would have collapsed 40%, just like houses, stocks, and commodities all collapsed.
The Fed's *job* is a deflationary smash is to *add money* to keep its *value* roughly unchanged - not its *quantity* unchanged. This is precisely what the Fed *failed* to do in the 30s and was rightly excoriated for by actual monetarist economists. Now with it doing the correct thing with the correct result, it is excoriated by men who *wanted* the smash to be *worse*, because they don't like the government or any of its institutions or present policies. They simply want to be *obeyed*, and if their pet policies are not enacted them they ritualistically predict disaster - and *want* it.
They are in this respect no different from the leftists who wanted to lose the war in Iraq because the other party voted for it. The disease is hyperpartisanship and its underlying cause is the inability to admit that politics is not the sum total of human life, combined with a strident demand for total obediance to this or that "canned" ideology.
Well, the world simply does not require your approval to live and adapt and grow.
You might attack several contemporary policies as harmful to the economy - raising taxes in a recession this steep is something no actual economist supports, only flaks; cap and trade is a ruinous and unmotivated attack on the sinews of industry; you can't make health care cost less by subsidizing it still more. But nobody does. Everyone instead attacks the Fed and Wall Street and everything Bush also supported. They attack the country and they prophesy doom, doom, doom.
They want doom. If they are not obeyed they want the country to die and be damned. Their ideas are not, in their own minds, an objective technocratic means to the good of the country; they are a political means - slogans and jargon - to obtain obediance to their demands and power for themselves.
A looter and a pol can wave any flag, even one first stitched by capitalists. By their doom mongering you will know them. Men only committed to seeking power for themselves believe that any deviation from their list of demands is damnable and spells doom. Men actually committed to the survival and the success of liberty believe in the survival and the success of liberty.