Skip to comments.Yellen hints at boosting inflation to create jobs (Obama's Federal Reserve chairwoman nominee)
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 Feds 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 its 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. Shes eminently qualified. Shes got the best résumé of any designate. Shes been president of a bank, and shes been on the board. Shes got an esteemed academic career. Shes a good manager and a good leader.
Yellens 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 Feds mandate is to serve all Americans, Yellen said. Too many Americans still cant find jobs and worry how theyre going to pay their bills and provide for their families.
Yellen was alluding to the Feds 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.
Yellens supporters hope that she will double down on the jobs portion of the Feds mandate. Vaughn cautioned that her willingness to maximize inflation may be overstated.
A lot of people who spend time studying her speeches concluded shes not soft on inflation, he told TheDC. Its fair to say shes more dovish than some other potential nominees, but not a dove. Shes about where Bernanke is.
Vaughn added that Bernankes rampant money creation has added to the complexity of Yellens 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 shes 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 thats 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 Feds 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 Feds 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.
They all have high paying jobs now in S.F.
Everything with the 0bama administration is corrupt including the 2012 election.
We know how that goes. If they don’t confirm her, they “hate women.”
Great, another dyke appointment.
You CANNOT fix retarded.
I've told my kids that its (
their fault) up to them if they want to remain free.
Hopefully they will wake up.
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.
- Germany Cricket
The Twilight of Irredeemable Debt
Antal E. Fekete
Gold Standard University
She’ll kill the middle-class to save it. If the poor and uneducated think things are bad now, wait a year.
LOL. Are there really that many GOP inflation hawks left in the Senate?
*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]
devaluation, not looking forward to that
what a laugh
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.
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.
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.
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....
...”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
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.