Monday, December 9, 2013

Not exactly data-driven people

Quote of the day: "Among some of the most critical Republicans, let me say politely that they are not exactly data-driven people--” Jared Bernstein, commenting on Republicans' unfailingly failed predictions regarding the effects of Fed stimulus policies.

Politico has more
Republicans will use the expected vote this month on the nomination of Janet Yellen to chair the Federal Reserve as one more chance to slam the Fed’s easy money policies.

But there’s one big rub to their argument: Their predictions about the impact of these policies since they first began in late 2008 have been wrong so far.

Inflation has not spiked, and the value of the dollar has not collapsed. At this point, in fact, there are more worries about deflation than inflation.

But thanks to the tea party influence in the GOP — in particular the Fed-bashing Rand and Ron Paul wing of the party — ripping the Fed and the bigger role it is playing in the economy has become more a litmus test for party loyalty, regardless of whether the dire predictions have come true.
It's hard to tell with this crowd whether they're kooks, pandering to kooks, or both. Either way, their policy prescription--restricting the money supply--would be disastrous.

Naturally, this is the same crowd that believes that extended unemployment benefits are a "disservice" to the unemployed and that defaulting on the debt is a worthwhile colonic for the economy.

4 comments:

Hartzman said...

So we should print a trillion a year to subsidize our fiscal deficit and the real estate market?

Until when?

When has a global orgy of money printing worked?

Both D's and R's are at fault for letting the Fed pay for their retention of power.

btw..., fed printing has caused a great deal of inflation in the wrong places; financial markets and emerging market economies elsewhere.

We exported our price inflation and centrally controlled prices at home.

When has that prescription worked more than the short term?

Hartzman said...

Hugh Hendry Throws In The Bearish Towel

http://www.zerohedge.com/news/2013-12-06/hugh-hendry-throws-bearish-towel-his-full-must-read-letter

Dave Ribar said...

George:

An expansive monetary policy is the right call (an expansionary fiscal policy not hampered by manufactured crises from kooks would better still).

In contrast, hoping to get "deflation to fix the imposed imbalances" is foolish, reckless, and kooky.

Hartzman said...

I respectfully disagree.