The Wall Street Journal hit it just about right. It called the Federal Reserve Board interest-rate cut “a pre-emptive strike against the unknown.” They took their best shot, but don’t bank on miracles.

Maybe the banks do need saving. Maybe the country is going into a recessionary dip, and maybe we can stop it. Maybe we can prop up the housing industry; maybe we can get more people to spend more. So what the heck, let’s cut the interest rates.

The half-percent rate cut was like a shot of a banned performance-enhancing drug: The first-day results were akin to sticking a needle in the rear end of a stallion, but is the Federal Reserve Board really in business to goose Wall Street?

The cut may lower credit card interest payments–a little. It may lower rates for home equity loans–a little. It will bring little or no relief to people sweating out the threat of higher payments on their subprime mortgages, default and eviction. As for conventional mortgages, those interest rates may go up! On the other hand, it’s not such great news for retirees depending on certificates of deposit–their rates may go down.

The reason for these varied reactions to what the Fed and its chairman, Ben Bernanke, have done stems from the fear that the cut may result in new air being pumped into the debt bubble, resulting in greater inflation. Signs of such happenings were reported in the Financial Times, which noted that the US government’s thirty-year bond yield “rose to 4.76 per cent amid inflation concerns. Oil hit a record high in the US, while gold prices rose to a 28-year high of $726.95 an ounce. ‘The Fed now risks its credibility as an inflation-fighter,’ said Michael Pond, a bond strategist at Barclays Capital.”

The anemic US dollar, upon the news of the cut, immediately lost a few more red blood cells. It now costs almost $1.40 to buy a Euro, which, not so long ago, you could pick up for a mere 80 cents. If American interest rates stay too far below those in other countries, foreigners are going to lose their taste for financing our military adventures by purchasing our government bonds. Foreign goods will continue to rise in price–including toys from China, both with and without lead.

Beyond those dismal considerations, how often can we get a temporary fix to our long-range problems by encouraging a debt-soaked population to borrow more to buy more to keep the recession wolf from the door? In due course we will have an answer to that question.

People know that this Ferris wheel cannot keep turning without developing a serious case of the wobbles. They are worried. A new Reuters Zogby poll showed that one in three Americans expects a recession in the next year, with some even raising the specter of a 1930s-style Depression.

“The public mood is not just dark. What’s darker than dark? The mood is getting ugly,” said John Zogby, in a grim assessment of consumer confidence.

The late Milton Friedman, the Nobel Prize-winning economist despised by the left and beloved of the right (but no fool in any case), used to insist that there are limits to what the Federal Reserve Board can effectively do, and when those limits are exceeded troubles result.

He thought that the Fed should confine itself to keeping the dollar’s value even and making sure that when financial crises occur, the banking and financial system does not seize up and that money is freely available. To Friedman the idea that the Fed could “fine-tune” the economy and compensate for the imbecilities and crimes of the other organs of government was unrealistic, if not mischievous.

All you have to do is glance at the frumpy, dumpy bankers and economists on the Federal Reserve Board to recognize that they do not have fairy godmother potential and lack otherworldy powers. The Fed may have a role to play in coming to terms with this mess, but it can’t save us from ourselves.