NP. Back to the Bernanke-Krugman debate, sorta

[David Morris]

http://www.slate.com/blogs/moneybox/2012/07/10/opportunistic_disinflation_why_the_fed_won_t_act.html

Regardless of stated objectives, the Fed is in fact trying to target
something like the current inflation trajectory. You could
characterize it as a policy of "inflation that's as low as possible
without pushing the economy into a new recession."

The technical term is "opportunistic disinflation." When recession
hits, you try to bring back growth. But you also seize advantage of
the slack in the economy to push the trend level of inflation down,
rather than seeking a rapid return to full employment conditions. It's
morally wrong but very consistent with the value system of modern
central bankers. Recall that Jean-Claude Trichet proclaimed his
disastrous turn helming the European Central Bank to be a smashing
success because inflation was lower than it had ever been under the
Bundesbank. By the same token, Ben Bernanke has brought us the lowest
inflation of any Fed chairman of the postwar period. You may call it
prolonged mass unemployment, but he may see it as a huge success.


On Tue, Jul 10, 2012 at 6:25 PM, David Morris <fqmorris at gmail.com> wrote:
>
> Da Fed ain't doing it's job.