Home
D&D
Music
Banner Archive

Marvel Comics Timeline
Godzilla Timeline


RSS

   

« SuperMegaSpeed Reviews | Main | I've never seen one land, but i always look up to make sure when i'm passing through »

Who to blame?

Quoting most of a Yglesias post:

Bernanke said, repeatedly, that he believes there are additional steps that he could take to bolster real growth and that he remains at the ready to unleash those steps if he thinks conditions warrant.

In other words, whatever it is that people who aren't named "Ben Bernanke" think is standing in the way of the Fed reducing the unemployment rate, Ben Bernanke thinks that nothing is standing in his way other than his own relative lack of concern with the fate of jobless people.

His view is that he could do more, and that if the situation gets worse he may do more, but that he doesn't regard a years-long period of mass unemployment as that big a problem. He's more concerned with preserving the Fed's credibility at capping consumer price increases at a two percent annual level. That's his personal judgment. Better for millions to stay unemployed than for them to start commuting to work and moving out of their parents' basement, pushing up oil prices and rents. It's a perverse judgment in my view, but nobody on the Hill wanted to directly challenge it.

This is entirely fair criticism and i agree with it, but it's worth remembering that the reason we're looking to the Fed right now is because our political system is completely gridlocked and the Fed (because it isn't accountable directly to voters or politicians) is the only one with any power that can act. But most economists agree that fiscal stimulus (e.g., government spending) is more effective than monetary stimulus (e.g., manipulating interest rates). And interest rates are already effectively at 0, so anything the Fed does will be somewhat unconventional and unproven. This isn't to say there aren't a lot of good ideas about what the Fed can do (and indeed, as Yglesias points out, Bernanke himself thinks he could do a lot, if he only wanted to). But we should also keep in mind that we're only looking here because of the failure of our political system.

By fnord12 | June 8, 2012, 10:04 AM | Liberal Outrage