Skip to comments.A Rebellion at the Federal Reserve? (Must of read Krugman)
Posted on 05/03/2012 6:47:58 AM PDT by C19fan
Chicago Federal Reserve president Charles Evans doesn't look the part of a heretic. But in the cozy, conservative club that is central banking, he certainly qualifies. While most of his colleagues at the Fed have recently taken an even more hawkish turn, Evans remains a champion of additional monetary stimulus. And on Tuesday he took an even bigger step: He became the first sitting Fed member to endorse nominal GDP (NGDP) level targeting.
Sounds wonky? It is. But here's why Evans' suggestion is also extremely bold. The Fed famously has a dual mandate: It's supposed to promote the maximum level of employment consistent with its two-percent inflation target. In reality, this dual mandate often looks more like a single inflation mandate. NGDP level targeting would do away with this problem by rolling the mandates together. And right now, that would mean a much more aggressive Federal Reserve.
(Excerpt) Read more at theatlantic.com ...
No. Part of the dual mandate is stable prices. Two percent inflation is not stable prices. Your money losing half its value in 36 years is not stable prices.
Must of . . . ???
I thought the stagflation of the 1970s and the low inflation growth of the 1980s had finally killed the Pillips curve. Inflation is not a sign of a healthy economy. In fact, the natural state of the economy is slightly deflationary to match the increase in productivity. One dollar should be able to buy a little more in ten years than one dollar today because people will be more productive on average. Anything above that is a sign that those controlling the printing press are skimming some unearned income from the economy.
Whether it be the EPA, the Dept. of Energy, or the Fed, it is clear that appointed ideologues have great power and are harming the American people. This ceding of major policy decisions to the unelected and unaccountable is a serious flaw in our republic.
Matthew O’Brien is a economic illiterate, to start with. He’s also cheerleading an idiot (Charles Evans) who looks the part, BTW, and who wants to reignite inflation. It’s a leftist Keynesian screed, to be sure.
Do you seriously believe that the Congress or comrade Obama would do a better job?
I had an economics professor who stated that the economy can handle any constant, predictable rate of inflation or deflation except for two sticking points: physical currency being excluded from the nominal growth or shrinkage of values and taxes being charged on gains that come strictly from inflation. Other than those an economy could handle 100% inflation just so long as it was predictable. But of course the "other than that" is similar to saying "other than that Mrs. Lincoln, how was the play".
The Fed is and has been a disaster. It is the only employer in the U.S. that can and does punish employees if they get sick or injured on the job.
When I took econ in the mid to late 80s, the Phillips curve was still in the text books but in the lectures it was treated as a historical theory that had been overwhelmed by new evidence like luminiferous ether in physics or Lamarckian inheritance in biology. It looks like it is either coming back, or at least those who think they can profit (either monetarily or in power) from running the printing presses at ludicrous speed are digging it back up.
So if the trains run on time and you get a good cocktail in the bar car, nothing else matters?
Must have read. Must HAVE read, not must OF read.
We are letting you off with a warning this time, but next time you may not be so lucky.
The FR Grammar Police
All the stimulus and quantitative easing in the world will not work when regulation is overwhelmingly oppressive and the Federal government is holding a gun to the heads of American small business with the combination of heavy-handed regulatory enforcement and excessive taxation.
Mr. Evans is applying academic theory to a street fight. He needs to come out of his castle and try to understand the reality of what is happening to folks on the street.
Must of got up on the wrong side of the bed.
I'll meditate on that next time I buy (fewer)groceries.
Well, certain basic grammatical errors just jump off the page at me and are distracting.
I was taught that if you can't write clearly, you can't think clearly, and I believe that. "Must of" makes no kind of logical sense at all.
Plus, substituting "must of" for "must have" makes a writer look like a major looser.
(Ha-ha, you thought I spelled "loser" incorrectly, but I'm just messin' with ya.)
So this guy’s biggest fear is deflation?
So this guys biggest fear is deflation?
The Phillips curve was debunked by Milton Friedman, the best economist the world has seen since Adam Smith.
Governments can only effect economies for good in a very short time span, after that they cause ruin. In trying to protect from ruin after their mistakes they only cause more ruin.
The US capitalist system has been the goose that laid the golden egg for the world for the last 200 years. We are killing the goose.
While it is possible to have deflation, if we did have it it wouldn’t last long. The dollars are already let out, someone has them and are only waiting until the right time to use them to buy up everything they can at fire sale prices. That is why I tell people to convert all the money then can into precious metals.
Get out of debt. Even mortgage debt. Financial institutions will call loans when they get short on money. they won’t be interested in refinancing and if they do it will be for horrendous rates. Get out now while you can.
The radical Democrats that infest our government who have been elected by the ignorant electorate who have been purposely kept ignorant by the press and education system are all about the ruin of our economy. They want the US Capilist system to fail so that they can take over and manage who gets what. In other words they want you to treat them well and they will let you eat.
The only way to be secure is inflation proof money and getting out of debt.
Do I know how crazy I sound? Yes, I realize how it sounds but it is the handwriting on the wall that I see.
It is the easiest thing to be a critic but it is far more difficult to create something, even if not perfect. Even your attempted analogy, which I fail to see its relevance, demonstrates how easy it fault others. I challenge you to provide a meaningful and perfect alternative to the present system.
Inflation is an assault on the purchasing power of the dollar,a destruction of capital, and a redistribution of wealth from creditors to debtors and from new, late holders of money to older, earlier holders of money. It results in economic decline and decay,decrease in total productive ability and decreased accumulation of capital,decrease in the real rate of profit, and the impoverishment of wage earners.
Discussion about Federal Reserve policies is an exercise in programmed ignorance. It is not a Federal institution. It is privately owned and most of the owners are foreign banks. Yet they print our money and dictate the health of our economy. The Fed is nothing but a monetarist swindle cartel and needs to be disassembled in the next 10 minutes. Read the book “The Creature from Jeckyl Island” to see how globalist banking elites play us for suckers and fools every day of the week.
This would be meaningful because the Congress would be beholden to the people. Nothing is perfect but the Federal Reserve is beholden to none and it is a disaster.
`I would be more worried about populism controlling our financial sector. Congress still retains oversight over the Federal Reserve as is confirmed by the ongresshearings before Congress. I suspect that Congress ceded power to the Federal Reserve so members of Congress could avoid blame for financial problems - so much for Congress being beholden the people.
I would be more worried about populism controlling our financial sector. As it is now a non-elected private body is helping to ruin the economy and the financial sector. All the while personally benefiting financially from the havoc they create.
Congress still retains oversight over the Federal Reserve as is confirmed by the hearings before Congress. Congress has oversight of many things and they are all going to crapper because Congress does not do what they are supposed to do.
I suspect that Congress ceded power to the Federal Reserve so members of Congress could avoid blame for financial problems - so much for Congress being beholden the people. That is true but just because someone else allowed Congress to skip its duties does not mean we should also allow them to continue in this.
If the recent polls showing Congress' unfavorable ratings being so high and if large numbers are returned to office in November, what does that tell you about Congress being beholden to the people?
I would like to see the Fed gone and I have told my Representative and my Senators that the Fed should be removed. They continue to ignore me but one is retiring and one is in a fight for his seat so we shall see what happens.
Exactly. And only the job authorized by the Constitution. I'm trying to get my head around the idea of the Founders' view of some academic rat bastard who represents private banks being in control of absolutely everything. I don't care what kind of "job" he's doing.