Ben Bernanke Looks Past the Crisis

Ben Bernanke has a bit of a dilemma.  On the one hand, he wants to be a credible inflation hawk, to keep expectations of inflation from doing bad things to the economy.  On the other hand, he wants to reassure everyone that he's going to keep the liquidity in as long as necessary, to keep expectations of deflation from doing bad things to the economy. 

So he did something rather clever.  While leaving rates low, he specified under which conditions he'd raise them.  The markets apparently didn't like it, because the stock market wants a central banker who never takes away the punchbowl.  But it's exactly the sort of tenative quasi-step back towards tightening that we want in these delicate times.

If only Obama would do the same thing, I'd be much comforted.