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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: Flavious_Maximus

They all have high paying jobs now in S.F.

41 posted on 10/09/2013 5:28:33 PM PDT by Liberty Wins ( The average lefty is synapse challenged)
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To: Iron Munro

Everything with the 0bama administration is corrupt including the 2012 election.

42 posted on 10/09/2013 5:36:19 PM PDT by kevinm13 (Tim Geithner is a tax cheat. Manmade "Global Warming" is a HOAX!)
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To: vette6387

We know how that goes. If they don’t confirm her, they “hate women.”

43 posted on 10/09/2013 5:37:38 PM PDT by familyop
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To: 2ndDivisionVet; a fool in paradise
Terry is rested and ready for a comeback!

44 posted on 10/09/2013 5:39:53 PM PDT by Revolting cat! (Bad things are wrong! Ice cream is delicious!)
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To: 2ndDivisionVet

Great, another dyke appointment.

You CANNOT fix retarded.

45 posted on 10/09/2013 5:47:14 PM PDT by unixfox (Abolish Slavery, Repeal the 16th Amendment)
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To: Paladin2
Heh....exactly. To serve man. I wish I could laugh at all of this, but I've seen it before....

...and there's no Ronaldus Maximus to pull us out this time.
46 posted on 10/09/2013 5:58:50 PM PDT by 98ZJ USMC
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We are seriously screwed, but as an OWG (Old White Guy) I can get to a Virtual Galt situation to live out my days.

I've told my kids that its (their fault) up to them if they want to remain free.

Hopefully they will wake up.

47 posted on 10/09/2013 6:03:42 PM PDT by Paladin2
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To: 2ndDivisionVet

She will do whatever the idiot in the White House tells her to do.

The Bonds we are buying with the money we are printing , are as worthless as the money and printed on the same press.

My question is why bother to print the bonds, it’s wasteful, just print the money and be done with it.

48 posted on 10/09/2013 6:05:43 PM PDT by Venturer (Keep Obama and you aint seen nothing yet.)
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To: 2ndDivisionVet

- Germany Cricket

49 posted on 10/09/2013 6:06:34 PM PDT by devolve (----- ----- ----- ----- shall not infringe upon my smoking MacBook PRO ----- ----- ----- -----)
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To: 2ndDivisionVet
The Twilight of Irredeemable Debt
Antal E. Fekete
Gold Standard University

50 posted on 10/09/2013 6:26:04 PM PDT by Stentor
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To: 2ndDivisionVet

She’ll kill the middle-class to save it. If the poor and uneducated think things are bad now, wait a year.

51 posted on 10/09/2013 8:14:54 PM PDT by 1010RD (First, Do No Harm)
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To: vette6387

LOL. Are there really that many GOP inflation hawks left in the Senate?

52 posted on 10/09/2013 8:17:31 PM PDT by 1010RD (First, Do No Harm)
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To: Paladin2

*The blue book, the blue book is a ...[lost to wind]

+What? I can’t hear you!

*The Feds Blue Book, we’ve made a translation. It’s not an economic policy, it’s a cook book: a cook book for cooking people!

[too late our hero is doomed]

[fade to black]

53 posted on 10/09/2013 8:23:10 PM PDT by 1010RD (First, Do No Harm)
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To: 2ndDivisionVet; Paladin2

devaluation, not looking forward to that

Create jobs?

what a laugh

54 posted on 10/09/2013 8:25:22 PM PDT by GeronL
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To: 2ndDivisionVet

If she wants to “boost inflation” all she has to do is get the BLS to stop lying and using voodoo statistical methodology.

Crap, inflation is really about 8% now. That’s not enough for these morons?

If inflation created jobs (someone must have put acid in this woman’s drinking water) then we’d have a job market on steroids right now.

55 posted on 10/09/2013 8:55:35 PM PDT by ChildOfThe60s (If you can remember the weren't really there)
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To: Liberty Wins

My daughter moved from SF to Louisville a few years ago. She took a 50% cut in pay and....drum roll please....has more disposable income AND a mortgage payment on a little house that is 30% of the rent she paid for a 400 SQ FT apartment.

A real laugh? Her car title was moved to KY 4 years ago and the State of CA is still sending her letters demanding she pay for tags and registration. Liberals love dead voters so much, they should collect taxes from them.

56 posted on 10/09/2013 9:01:45 PM PDT by ChildOfThe60s (If you can remember the weren't really there)
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To: 2ndDivisionVet

Right, just give money to several more European electric car companies and send more money to Brazil so they can get their deep ocean oil field really humming along.

57 posted on 10/09/2013 9:21:45 PM PDT by Flint
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To: Paladin2
I've got kids like people, values, law abiding and all, but have bought the obamanation lock, stock and barrel.....we'll see how they stand as things get tougher and they see themselves working so hard and others just getting freebies, freebies, freebies....

one lesson I never wanted to believe and never told my children....that hard work doesn't always get you there....that there will be people who will smooze their way to the top and that unqualified people will be hired before them and promoted before them for no good reason....

58 posted on 10/09/2013 10:41:42 PM PDT by cherry (.in the time of universal deceit, telling the truth is revolutionary.....)
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To: 2ndDivisionVet

...”Yellen’s supporters hope that she will double down on the portion of the Fed’s mandate,,,”

Tapering was backed off due to not enough cattle to pull the bailout wagon. Extortion-Care will be the forced work-camp whipping for their free ride bailout.

Extortion-Care is the Government Work-Camp: Arbeitsziehungslager

59 posted on 10/09/2013 10:48:24 PM PDT by Varsity Flight (Extortion-Care is the Government Work-Camp: Arbeitsziehungslager)
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To: vette6387

Let’s see...inflating the currency ala Zimbabwee will decrease unemployment?

That is, giving trillion$$$ to the super rich bankers will help the little people?

How, by raising the cost of food, fuel, etc beyond what the little people can afford?

Sounds like a real world version of “bleeding the patient until he recovers”.

Or like the saying, “The beatings will continue until morale improves.”

Stupid is, as stupid does.

Only a total moron (or an Obama voter) would fall for this kind of b.s.

60 posted on 10/09/2013 11:03:58 PM PDT by OldArmy52 (The question is not whether Obama ever lies, but whether he ever tells the truth.)
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