Helicopter Ben

Ben Bernanke and the Fed is playing catch-up to the global financial tanking with a 3/4-point drop in the prime interest rate, which will in theory keep spurring movement of money into and through the economy. Which is what you'd expect from a man who is nicknamed Helicopter Ben (with explanation from Wikipedia):

In 2002, when the word "deflation" began appearing in the business news, Bernanke gave a speech about deflation.[10] In that speech, he mentioned that the government in a fiat money system owns the physical means of creating money. Control of the means of production for money implies that the government can always avoid deflation by simply issuing more money. (He referred to a statement made by Milton Friedman about using a "helicopter drop" of money into the economy to fight deflation.) Bernanke's critics have since referred to him as "Helicopter Ben" or to his "helicopter printing press".

Responding to today's rate cut, John Aravosis at AmericaBlog has a couple of good pointers, first to the Washington Post

It is the largest single rate cut since 1984, beyond even the initial half-point reduction that the Fed made following the Sept. 11, 2001, terrorist attacks.... The global sell-off has involved some of the worst market declines since Sept. 11, 2001, and has erased more than $5 trillion in value from stock markets this year....
[...]
"This is an expression of panic -- really nothing less than panic about prospects for the U.S. economy," said Stephen Green, senior economist with Standard Chartered Bank.

And from CNNMoney/Fortune:

But Bernanke is setting the stage for an even bigger recession down the road. Just as the ultra-low rates of the early 2000s created many of the problems we're experiencing today, pumping money into the system would probably stoke inflation, forcing the Fed to hike rates sharply in the near future. "It's better to take a small recession and kill inflation immediately instead of facing high inflation and a really big recession later," says Carnegie Mellon economist Allan Meltzer.
[...]
Indeed, while the economy is sending mixed messages about growth, the signs of increasing inflation are flashing bright red. For 2007 the consumer price index rose 4.1%, the biggest annual increase in 17 years. Gold, historically a reliable harbinger of inflation, set an all-time high of more than $900 an ounce. The dollar is languishing at a record low against the euro and a weighted basket of international currencies. "Flooding the market with liquidity is a disaster for the purchasing power of the dollar," says David Gitlitz, chief economist for Trend Macrolytics.