Few American entrepreneurs
will cheer the heavy hint by Ben Bernanke, Chairman of the Federal Reserve,
that there will be no more interest rate cuts in the near future.
Yet most should be
cheering him. They may yet owe their survival in business to him. If the
recession is not to turn into a depression, the key decision-makers, of whom
the Chairman of the Fed is the most important, must keep their nerve.
That is what Bernanke
appears to be doing.
He seems to accept
that the recession is something that is going to happen, a hit we must take. We
have been borrowing too much for too long, and we must pay for the consequences
now before they get worse.
His decision to
forswear further rate cuts, especially in an election year, may also be a vote
of confidence in the economy. He expects things to get worse, but he also
expects them to get better without the artificial stimulus of rate cuts.