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Yellen hints at boosting inflation to create jobs (Obama's Federal Reserve chairwoman nominee)
The Daily Caller ^ | October 9, 2013 | Tim Cavanaugh, executive editor

Posted on 10/09/2013 3:13:15 PM PDT by 2ndDivisionVet

Federal Reserve chair nominee Janet Yellen Wednesday suggested that she will put a renewed emphasis on “jobs” in her role as Chairwoman of the U.S. Federal Reserve Bank.

President Obama nominated Yellen, a vice chairwoman of the Board of Governors of the Federal Reserve System and former president and CEO of the Federal Reserve Bank of San Francisco, to run the U.S. central bank Wednesday. If confirmed by the Senate, Yellen will become the first woman to run the Fed in its hundred-year history.

Yellen is expected to accelerate the devaluation of the dollar by continuing or even expanding the Fed’s open-ended bond-buying program. She has been consistently favored by job-creation hawks, who hope that she will follow a looser inflation policy than they expected from her chief rival for the Fed job, former Treasury Secretary and Harvard University President Larry Summers.

“I think it’s a really good pick,” economist Mark Vaughn, a fellow at the Murray Weidenbaum Center on the Economy, Government and Public Policy at Washington University of St. Louis, told The Daily Caller. “She’s eminently qualified. She’s got the best résumé of any designate. She’s been president of a bank, and she’s been on the board. She’s got an esteemed academic career. She’s a good manager and a good leader.”

Yellen’s brief comments Wednesday suggested she may fulfill some of the hopes of job-creation zealots. Preposterously asserting that “the economy is stronger and the financial system is more stable,” Yellen added that despite “progress” under current Chairman Ben Bernanke, U.S. monetary policy has far to go.

“The Fed’s mandate is to serve all Americans,” Yellen said. “Too many Americans still can’t find jobs and worry how they’re going to pay their bills and provide for their families.”

Yellen was alluding to the Fed’s “dual mandate” of managing inflation and maximizing employment. This mandate is based on an antique economic theory called the “Phillips Curve,” which posited an inverse relationship between inflation and unemployment.

The Phillips Curve, a relic of Keynesian mythology, has been abandoned by economists after repeatedly failing to bear out in reality — most notably during the stagflation of the 1970s, and arguably during the unprecedented economic stagnation of the past six years. Since 2007, Bernanke has quadrupled the monetary base, and inflation — which is widely described as being under control or even too low — has in fact robbed the dollar of 13 percent of its value, according to the Bureau of Labor Statistics’ inflation calculator. Yet the economy has moved sideways, inflation remains above 7 percent, and household net worth is about where it was prior to the recession — amounting to a massive disappearance of buying power with no discernible positive effects on the economy.

Yellen’s supporters hope that she will double down on the “jobs” portion of the Fed’s mandate. Vaughn cautioned that her willingness to maximize inflation may be overstated.

“A lot of people who spend time studying her speeches concluded she’s not soft on inflation,” he told TheDC. “It’s fair to say she’s more dovish than some other potential nominees, but not a dove. She’s about where Bernanke is.”

Vaughn added that Bernanke’s rampant money creation has added to the complexity of Yellen’s job.

“Her biggest challenge is going to be as much political as monetary policy,” he told TheDC. “The Fed has this unprecedented balance sheet and she’s going to have to unwind it. It has a lot of mortgage-backed securities in its portfolio, and the housing industry is very strong in Washington. This is not a country that’s in love with central banking, going back to the foundation of the republic. In some ways, the Fed was lucky in its enemies, because Ron Paul is kind of goofy. But he was making some legitimate points. Her big challenge is going to be maintaining the Fed’s independence and fighting down political attacks.”

Another challenge for any Fed chief is keeping Americans convinced that “controlled” inflation is a naturally occurring or positive phenomenon — a notion that flies in the face of all lived experience for people outside the fantasy realm of monetary policy, who see only boarded-up businesses, high unemployment and endless economic stagnation.

Although monetarists maintain that inflation is a key component of modern economics, it has in fact been understood for centuries. In “The Wealth of Nations,” economist Adam Smith discusses inflation at length — always describing it as debauchment of the currency that enriches the king at the expense of his subjects.

Rather than refuting this obvious point, monetarists rely on hectoring propaganda, such as this short film from the Depression era:


The Fed celebrates its 100th birthday later this year. The dollar has lost more than 95 percent of its value during that time. In the hundred years prior to the Fed’s creation, the United States expanded from a handful of states on the eastern seaboard to a continent-spanning nation, acquired both Alaska and Hawaii, abolished slavery, built the transcontinental railroad, became an unprecedented world power, and experienced levels of economic growth and social mobility that it has never again matched — all of those achievements having been accompanied by steady deflation that left the dollar worth more in 1913 than it had been in 1813.

TOPICS: Breaking News; Business/Economy; Culture/Society; Government
KEYWORDS: bernanke; ditto; economy; employment; federalreserve; hyperinflation; inflation; jobs; obama; yellen
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To: 2ndDivisionVet

I’m working full time and struggling like hell and this bimbo wants to create more inflation.All I can say is I hope the republicans can her nomination to lead the Federal Reserve Board.

If the republicans were smart they would disband the FED.It has done nothing but suck the life out of the working man for the last 40 plus years.I’ve had it with the FED.

21 posted on 10/09/2013 3:39:42 PM PDT by puppypusher (The World is going to the dogs.)
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To: bert; PeterPrinciple; MosesKnows

-———What Interest Rate Halts Borrowing?———

We’re about to find out it seems : )

22 posted on 10/09/2013 3:39:48 PM PDT by bert ((K.E. N.P. N.C. +12 ..... Travon... Felony assault and battery hate crime)
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To: 2ndDivisionVet

Yeh get those interest rates up high enough and $5 for a can of soup and everything will be fantabulous.

23 posted on 10/09/2013 3:57:07 PM PDT by Georgia Girl 2 (The only purpose of a pistol is to fight your way back to the rifle you should never have dropped.)
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To: 2ndDivisionVet
Yellen needs to read this book, which I'm currently reading:

The author clearly shows that increasing the money supply the way the Fed is doing now, in order to inflate the currency, has never worked before in history and has always been counterproductive.
24 posted on 10/09/2013 3:58:30 PM PDT by Signalman
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To: Paladin2

The old saying was, “Smooth move, Ex-lax!” Another friggin’ moron! Bob

25 posted on 10/09/2013 4:00:31 PM PDT by alstewartfan ("Guardian angels, wherever you may be Reach down and keep my soul for me. Al Stewart)
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To: Uncle Miltie
Economics is NOT a Science.

(Never wuz)

26 posted on 10/09/2013 4:05:47 PM PDT by Paladin2
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To: 2ndDivisionVet
"“The Fed’s mandate is to serve all Americans,” Yellen said."


27 posted on 10/09/2013 4:07:08 PM PDT by Paladin2
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To: Paladin2
She also believes that free markets aren't always helpful...that they need *help* from the government. ....sigh....
28 posted on 10/09/2013 4:10:28 PM PDT by Jane Long (While Marxists continue the fundamental transformation of the USA, progressive RINOs assist!)
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To: 2ndDivisionVet

But will she “focus like a laser” on jobs?

29 posted on 10/09/2013 4:11:04 PM PDT by PaleoBob
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To: Jane Long
" RINOs assist! "

Dang right there!

27 vs 19 ?

We got a lot of work to do.

30 posted on 10/09/2013 4:12:48 PM PDT by Paladin2
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31 posted on 10/09/2013 4:19:53 PM PDT by onyx (Please Support Free Republic - Donate Monthly! If you want on Sarah Palin's Ping List, Let Me know!)
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To: vette6387

The first woman Fed president? Of course she will be confirmed. PC trumps all other considerations.

32 posted on 10/09/2013 4:21:49 PM PDT by Pining_4_TX (All those who were appointed to eternal life believed. Acts 13:48)
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To: 2ndDivisionVet
Weimar, here we come!!!
33 posted on 10/09/2013 4:27:05 PM PDT by mojito (Zero, our Nero.)
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To: 2ndDivisionVet

None of those people could run a free lunch stand.

34 posted on 10/09/2013 4:27:08 PM PDT by Don Corleone ("Oil the the cannoli. Take it to the Mattress.")
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To: Iron Munro

Obama Administration Motto:

“You think it’s bad now? Wait until tomorrow.”

With Obama, yesterday was always better than today.

35 posted on 10/09/2013 4:43:38 PM PDT by laplata (Liberals don't get it .... their minds are diseased.)
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To: 2ndDivisionVet

High inflation - high interest rates. We’re screwed both ways.

36 posted on 10/09/2013 4:53:29 PM PDT by Lent
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To: 2ndDivisionVet

Announcing her intention to be the executioner of the US dollar. Ben chickened out of finishing the job, I guess.

37 posted on 10/09/2013 4:57:55 PM PDT by thoughtomator 2.0
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To: vette6387

she will be confirmed. she has qualifications a mile long and those RINOs won’t stop her. She’s in.

Liberal Fed Chair focusing on jobs = socialist meddling

This can’t be good.

38 posted on 10/09/2013 5:01:59 PM PDT by plain talk
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To: 2ndDivisionVet

I was astounded to hear from my grandson in San Francisco that he doesn’t have a single friend or co-worker there who is paying back their student loans. Apparently they are all expecting hyper-inflation to enable them to do it, soon.

39 posted on 10/09/2013 5:02:33 PM PDT by Liberty Wins ( The average lefty is synapse challenged)
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To: Liberty Wins

Those students are not going to be able to find jobs that will enable them to pay back the loans.

Yellen thinks she is going to be able to create jobs with her printing press.

Businesses are not going to be hiring while the Bolsheviks are destroying the USA.

40 posted on 10/09/2013 5:15:10 PM PDT by Flavious_Maximus
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