It makes my deja vu hurt

A financial reporter misses the obvious joke:

When Federal Reserve Chairman Ben Bernanke takes the podium next week at the central bank's annual meeting in Jackson Hole, Wyoming, his sense of deja vu may be overwhelming.

Stocks have been giving up gains won after last year's speech... Oil prices are higher and there's been little improvement in the job market. Bond yields are down...

It's almost as if QE2, the Fed's $600 billion bond-buying program first mentioned at last year's meeting and designed to boost the struggling economy, never happened.

Of course it happened. We have the debt* to prove it. QE2 occurred right on schedule and was carried out according to plan. It just didn't accomplish anything, least of all what was promised.  It did not get the economy out of its funk and it didn't make the housing market recover. Hell, it didn't even hold interest rates down**, as the current dip in rates intensified after the program was over, probably due to actions in Europe.  The truth of the matter is that QEII, like QEI, like the Bush and then Obama Stimulus packages, like the Fed buying a couple trillion in mortgages, might as well have never happened.

The title of the Reuters article, however, asks an unexpectedly rhetorical question: Fed May Have Bullets Left, but Are They Blanks? Well, they have all been so far, by the article's own reckoning. Is there any evidence that Bernanke has saved the best tools he has for last? But just to be clear let me answer this in the negative, as the very assertion that Deputy Fife Bernanke has a bullet or two in his uniform pocket at least implies that there is a probability, or at least a reasonable possibility, that he will be able to shoot something.

This possibility is highly unlikely, to say the least. To wit: the article notes, in all seriousness, that since QE2 was such a smashing failure, Bernanke's next "trick" (their word, his admission) will be "buying long-dated Treasuries to push down long-term rates."  It sounds like a reasonable and logical policy that just might work.  However, those with memories longer than 50 seconds might recall that was precisely the purpose, the method, and the very definition*** of QE2. And we all know how well that program worked. 

* technically, the Fed has the bloated balance sheet to prove it.
** Though Bernanke's actions surely saved or created an unprovable number of basis points.
*** "A week ago, the nation's central bank announced that it would buy $600 billion in long-term U.S. Treasury bonds, ostensibly to push down long-term interest rates."
-- Dallas Morning News, "What is Fed's QE2, and what will it do? Experts explain in everyday English " 11/10/10