NP - The Fed's Priorities

[alice wellintown]

>>
> Yes, of course, time is needed, but what about the irreparable harm being
> done by Congressional inaction on spending to prop up state and local
> jurisdictions?   Teacher layoffs,  law enforcement, health care,
> infrastructure maintenance, etc. The short term is important too.

I agree. And the Fed, though it must keep its political statements
blunt, has, in its reports to the gov., warned the congress that the
Fed has a limited mandate, and limited power levers, that it has not
quite exhausted all of the fixes it can try, but it has done, at this
point, all it can, without taking unacceptable risks to the long term,
to address the short term sufferings and the irreparable harm being
done to regions, sectors, states, workers. Surely this is important
and not in anyway divorced from the longer term objectives. The Fed
has regional representation, and it is not ignoring any region or
state or sector. It can not because the damage, as you suggest, will
hurt the economy now, and later.  But it is not congress. The power of
the purse, when all politics is local, and the president is to be
decided in a few short months, is most powerful when it does nothing
but point fngers and collect cash.


>
> The central banks of the U.S. and Europe want more government action and are
> waiting for it to happen, and waiting and waiting.  In the U.S. there is no
> excuse.

The Fed can not force the Congress and the President into a deal. The
excuse, for the politicians,  is politics.


>
> The p-list has one resident physicist and maybe a couple three musicologists
> but we got a whole shitload of economists.  Why can't we come up with
> something the dismal science will be proud of?

So, on Saturday we had a party for my husband and hs geography
friends. Many work for the govt here or fro the govt-oil company. I
asked why so many doctors of geography (geology to Americans, for most
of these folks work with rocks and oil platforms) can not lower the
price of all these flex-fuels. In Brasil you can choose from several
fuel options at the gas station. They laughed, of course. Then,
everything got lost in translation as they told joke after joke about
the govt and its corruption and ineptitudes.
As for economics, I make it my business to erradicate financial
illiteracy wheneer I get the chance, but I never feel all that certain
about my lessons. Perhaps I should stick to grammar.