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in 2006, Ben bernanke explained the reason for his Federal Reserve raising interest rates over 400% in 2 short years (from 1% to 5.25%) was “to slow down the economy THROUGH HOUSING to keep WAGES from rising at full employment”. In 1977, Congress politicized the Fed by giving it a “dual mandate” to strike a balance between inflation & jobs, which in effect means that the Fed allows prices to rise when the economy is bad & people least can afford it, but won’t allow wages to rise when the economy is good & the demand for labor begins to exceed the supply at a certain price.

The Fed tries to kill the demand for labor by slowing the economy by “applying the brakes” so the economy doesn’t “overheat” as if the brakes of a car are its cooling system. In the 1977, the Fed became politicized by Keynesians under the theory that prices & the unemployment rate always move in opposite directions....so when the economy is bad, the Fed doesn’t worry at all about consumer prices......and when the economy is good, the Fed only worries about consumer prices...even when they aren’t a problem. As long as the Fed uses rigged Keynesian inflation gauges that are based on the idea that the economy depends on the housing sector

(in the 1970s, we used to talk about “housing starts” as a “leading economic indicator” but the Fed decided that housing is not an indicator but is prime mover of the economy & can be manipulated by manipulating the Fed Funds interest rate up or down according to some aggregative fiction that is the “national unemployment rate” that pretends we have just one national economy that the Fed can control. That’s why Bill Clinton in 1993 argued that the economy depends on housing, which depends on interest rates, which depend on deficits & surpluses.....but when Clinton took office in 1993, the Fed had lowered its Funds rate to 3% after having raised it to 8.75% bt 1990 to cause a recession, then raised it to 6.5% in 2000 to precipitate the NASDAQ crash....after having told Clinton ...and Bush before him, that it was necessary to raise taxes & fix the deficit to drive DOWN interest rates & eliminate fiscal drag on the economy, but then when the economy was growing at 5% with a budget surplus at the end of the 1990s, the Fed then claimed fast growth even with a budget surplus causes inflation......so it moved to kill demand for labor by slowing the economy & killed it instead by having interest rates far above where price inflation would dictate where it should be. The price of gold & the price of gas didn’t indicate anything like runaway inflation late in the 1990s. The price of gas was $1.11 in 1980 when the unemployment rate was 7.5% & rising, but only was $1.29 when the unemployment rate had fallen to 3.8% in 2000. in fact, the price of gas fell below $1 late in the 1990s when the surplus began. Imagine if the Fed just let the economy keep growing at 5% after 2000 & let the surplus pay off the national debt instead of causing a NASDAQ crash & recession because of excessive fear of inflation. IN the 1970s, the double digit inflation was caused by a commie steep tax code that killed competitioon & barred entry of competitors into the markets......where you had a 70% tax bracket at just $280,0000 & a 40% tax bracket at just $105,000. Immmigration and the Fed, plus Obamacare is killing the economy...plus spending. You’ve got poor uneducated Somalis moving to the United States with 9 children & some of them are handicapped & all of them require welfare and burden our school system and social welfare system. Money is being flushed down a black hole instead of being productive & capitalists are flush with money to start new ventures now...so inflation is low....but most new ventures fail......and a company such as Taylormade golf is up for sale by Addidas because it’s management had ADD & couldn’t stop producing the latest, greatest golf ball & driver every year, far beyond the market’s ability to bear buying a new adjustable driver every year at $500 a pop! And they would always release more than one, too...such as Jetspeed & Slider........or M1, M2, and R-15 at the same time. Who can afford to buy a new adjustable driver every year that claims to be the best ever and far above the last one. People stop believing the hype...and brands crash of their own failings...even if the products are good...because managers don’t understand people and markets anymore......)

I know I am rambling here...but the fact is that the GOP never seems to include the FED in its economic calculations...when it’s really ALL about the Fed. As long as the Fed believes that fast growth and low unemployment rates cause inflation, then the lower taxes are and the fast the economy grows to drive down the unenemployment rate—even if the budget is running a surplus-———the sooner & harder the Fed will tighten..and the bigger the crash will be...which is why Democrats and the press have persuaded most Americans that tax cuts lead to speculation and bigger booms followed by bigger busts...whereas Bill Clinton in 1993 said he WANTED his tax cuts to slow down George H W Bush’s then growing over 4% economy-—because “slow, steady growth is better than fast growth”. Democrats are going to claim that Obama has done a great job to keep the economy from “over-heating” because he raised taxes on investment income & the rich & business......whereas GOP can’t even think to credit the internet and competition from LOW taxes for low inflation.

In fact the GOP wants to slit its own throat by claiming the Reagan, Clinton , Bush and Obama economies all were fake “bubbles”....which only encourages the socialists to demand high tax rates & spending levels from the 1970s and running even more debt. The Fed always gets too easy, then overcompensates by getting too tight. You can’t expect the price of gas to stay at $1.11 from 1980 to 2001 when the economy had grown exponentially larger & when the unemployment rate in 2001 was half of what it was in 1980 and demand for oil was at record highs all over the world.