On Tue, Aug 9, 2011 at 1:44 PM, Doug Henwood <[email protected]> wrote: > Bernanke & Co. just announced they'll keep the fed funds rate at > "exceptionally low levels...at least through mid-2013." Bernanke is about the > only major economic policymaker in the world in favor of stimulus these days. >
That says more about the other policymakers than it does about Bernanke. Even Paul Krugman (who is normally very reluctant to criticize his former senior colleague at Princeton) thinks Bernanke is not doing anywhere near enough: http://krugman.blogs.nytimes.com/2011/06/22/profiles-in-fed-cowardice/ ----------------------------snip Profiles in Fed Cowardice Not really a surprise, but still shocking. The Fed predicts disastrously high unemployment as far as the eye can see. And in response to this dire prospect, it declares its work done. Notice that the Fed does not buy into the notion that there has been a large rise in the structural rate of unemployment, that 9 percent is the new normal. That stuff off to the right, labeled “longer run”, is in effect the Fed’s estimate of how low unemployment could and should go without causing inflation problems. So the Fed agrees that something should be done to greatly increase demand. But it washes its hands of the problem, even though Bernanke and his colleagues are well aware that nobody else will act. I’m aware that there are doubts about how much the Fed could accomplish; I share those doubts. But that’s no reason not to try. This display of passivity is awesome. And it’s shameful. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
