Fighting the Last War – By Frank K. Martin

Thanks to Jason for passing this along.

The Federal Reserve's efforts to encourage borrowing and spending are at odds with consumers' need to save.

FED CHAIRMAN BEN BERNANKE, not long ago a cloistered academic, has unwittingly found himself on the front lines as a five-star general in a war against deflation and depression. He has been valiant in effort, well-intended in strategy, but fighting the only war he knows—the one that ended more than 70 years ago.

Armed with the lessons of the 1991 Gulf War, many generals were blind to the different challenges in the second war against Iraq. General Bernanke, having carefully studied the lessons of the Great Depression, is likewise ill-prepared to fight the current war.