no third solution » Monetary Policy
Engineering a Depression: Monetary Policy 101
(Minor updates to text @ 11:20 PM PST – 6-Jan-2009) I said it before: Their idea of “fixing” the economy is not the same as yours. In a recent article in the Financial Times, Samuel Brittan opines about the peculiar nature of the current economic doom and gloom. Interestingly enough, is at least partially correct in diagnosing the problem: [I]t is … a logical absurdity that there should exist unsatisfied wants side by side with idle workers willing to supply them. The natural condition of mankind is one of scarcity, and conflicts are often about the allocation of scarce resources. You cannot usually have endless amounts of both guns and butter. Perplexing, indeed! Brittan is correct: we didn’t suddenly and collectively become less productive. We didn’t suddenly enter an age of abundance (in … Read entire article »
Filed under: American Politics, Economics Lessons, Monetary Policy
Paulson and Bernanke are Lying
In a recent article at Portfolio.com, Megan Barnett comments on discrepancies between financial/economic data publicly available in reports from the Fed, and statements to the contrary, made by Fed Chairman Bernanke and Treasury Secretary Paulson, in recent months, and wants to know if Paulson and Bernanke Are Lying to Us. There are … inconsistencies between what Bernanke stated to Congress in late October about consumer credit with the data made available by his own organization in the same month. So, what gives? Celent [a consulting firm] concludes that one of two scenarios is possible: 1) Bernanke and Paulson have access to far more data than is made available publicly and that data is painting a far more grim picture of the state of bank lending. “However, it is hard to see why … Read entire article »
Filed under: American Politics, Blog Reactions, Monetary Policy