Raise Interest Rates To Spur Lending?

We know that flies in the face of all conventional economic wisdom.

But for the past year the Federal Reserve has been providing commercial banks with an almost limitless supply of free money in the hope that they’ll make lots of new loans and help boost the economy out of the recession.

Yet the banks are extending precious little credit to consumers. To small businesses. To anyone.

Could it be that Fed Chairman Ben Bernanke has pushed conventional economic wisdom too far by driving interest rates too low?

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