Posted on 04/06/2012 5:23:01 AM PDT by GlockThe Vote
No, the real reason the attacks on Mr. Bernanke from the right are so destructive is that they’re an effort to bully the Fed into doing exactly the wrong thing. The attackers want the Fed to slam on the brakes when it should be stepping on the gas; they want the Fed to choke off recovery when it should be doing much more to accelerate recovery. Fundamentally, the right wants the Fed to obsess over inflation, when the truth is that we’d be better off if the Fed paid less attention to inflation and more attention to unemployment. Indeed, a bit more inflation would be a good thing, not a bad thing.
(Excerpt) Read more at nytimes.com ...
The Fed is supposed to ensure the integrity of the money supply, not tweak the economy to provide employment or whatever else the politicians think is important.
If government spending more money (they don’t have) will fix everything, how does one explain Greece?
Idiots like Krugman and those who think like him are why fiat currencies are so dangerous.
We have plenty of inflation. It’s just not reported.
The ex-enron advisor Krugman is such a joke. I often mock the leftists who support him on my facebook page. He is a pathetic shill and a lying fraud.
Exactly...inflation is terrible. Mr. Krugman thinks there should be more because he is not affected by it...he is rich and can afford anything he wants. For the middle class Obama’s inflation is killing us.
It is not uncommon for a family of four to drop $250 shopping for two weeks worth of groceries. To Krugman and the media elite this is nothing. They also have no problem with $100 gas fill-ups. To us it’s crushing.
Of course the media will not report this...it would finish Obama.
“Idiots like Krugman and those who think like him are why fiat currencies are so dangerous.”
Mr. Krugman is a brilliant, really-really smart, intensely intelligent, Progressive genius whose judgement sails over the heads of all those red-necked, knuckle-dragging, gun-loving, bible-thumping morons in flyover country. He knows everything about everything and is superior in every way.
/SARCASM/
I am almost done ridding my life of all the leftists, i have a few to go.
anyone still supporting this craziness is a traitor.
You know how after an editorialist writes a story they give a brief bio of the writer? I think for Krugman it would be:
Paul Krugman is a Princeton trained, Nobel winning Keynesian economist who theories and opinions on the American economic system has been wrong for more than 20 years.
“Krugman: Not enough inflation.”
Krugman: Not enough Cowbell.
There, fixed it.
The Fed is caught in a classic Liquidity Trap position which makes monetary policy virtually ineffective. Fiscal policy is the answer, but not the one most politicians like. Right now, tax cuts are the answer, both in personal and corporate taxes. Indeed, cuts in spending are not "lost dollars" as politicians would like us to believe. All it means is that private consumers have more dollars to direct to what they want, not what some bureaucrat thinks we want. My suggestions: Cut personal income taxes to a flat rate of 17%, cut corporate to 15%, and have Obozo issue an Executive Order stating that: ANWR is open for bid, ALL offshore leases are open for bid, Keystone is a done deal, the EPA is closed, and all federal permitting processes will be done in less than three months. Then stand back and watch how fast this economy heals itself.
Of course they could cut taxes, cut spending, but that's not their way.
Inflation is a fake solution designed to make it appear that the economy is growing while it robs thrifty people of their savings. I have a theory that there are three phases of government finance. In the first phase, government finances its operations by taxing the present. When it has exhausted all current taxing options, it turns to taxing the future by borrowing. When it runs out of borrowing options, it taxes the past by inflating its currency. After that, collapse, I am afraid. (If the government refuses to modify its out of control spending practices).
‘Fed paid less attention to inflation and more attention to unemployment’-—————
I thought that was Obama’s ‘the buck stops here, job.
Ludwig von Mises
Thanks for the laugh!!
Yeah, that’s the ticket. More inflation that the government won’t officially recognize. I am so tired hearing that the inflation is like 2% when food and gas and other energy is clearly double digits.
Krugman channeling William Jennings Bryant.
I left a few comments at the site.
Krugman is a joke.
Inflation is embezzlement and redistribution of wealth by deliberate dilution, just as when a bartender steals from the customer by diluting the drinks.
The wealth flows to the party issuing the freshly-printed money. It comes from those who hold wealth in the form of the currency they hold, in proportion to the amount of currency.
But this is not the end of the damage. When government issues money that cost it almost nothing to create, it is willing to bid any amount of it to buy the things it wants and to pay the people it wants to pay off. This naturally bids up the money price of wages and goods. The real wealth creators become second in line for the bidding.
Further, the flood of money depresses the time value of money. This forces those who are willing to lend their money to others to accept a lower rate of interest. This has the effect of denying them the interest income they would otherwise earn. People who are retired and living off their interest income no longer can and must start consuming their capital in order to pay their bills. The only way they can make the same interest income is to accept investments in instruments that carry far higher levels of risk.
Worse, as economist Roger Garrison shows in his wonderful book, Time and Money, suppressing the market price of the time value of money triggers errors in decision-making with regards to the apparent present value of long term projects. This causes people and companies to think that a project is affordable and sustainable when in fact it will not be once interest rates return to a value set by a free market. There are all manner of balance sheet distortions that occur under GAAP and FASB because the time value of money is just a false value. This destroys the truth of many price signals, and that error cascades through all investment decisions.
A simple example of this is when mortgage rates were way too low for high risk borrowers, like those with no income, no job and no assets. They were granted loans they would otherwise been denied and with that money they bid up the price of housing. Many people bought a bigger house or paid far more then they otherwise would have, and as a result we had a housing bubble we are still trying to recover from.
Lastly, the central bank will eventually get exhausted from its money printing and rational prices for everything will return. The consequences will not be pleasant to deal with. and people like Krugman will be clueless as to why their money-printing did not equate to wealth-printing.
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