Sumner’s spent a year or so trying to figure out what Bernanke’s thinking.  Pre-crisis, Scott and Ben were in almost perfect agreement.  But when the crisis hit, Bernanke seemed to suddenly come down with amnesia.  What’s up with that?

Arnold’s solution to Sumner’s Paradox:

The Fed has changed from a central bank to a piggy bank. Any economist
who tries to interpret Fed policy from the standpoint of economic
theory is playing a fool’s game.

Bernanke’s running the economy into the ground on purpose in order to help his new cronies?  Arnold’s story fits the facts, but it just seems too conspiratorial.  Does anyone want to convince me, one way or the other?