Tuesday, November 24, 2009

Y tu, Bradford?

No group of economists are bigger fans of Bradford DeLong than the Economists for Firing Larry Summers (and Ben Bernanke too).

I do not understand his defense of Ben Bernanke, except that he does not want to be responsible for Bernanke's canning by the Congress.

Ben Bernanke has led the US economy to 10.2% unemployment and counting while leaving plenty of arrows in his quiver, ostensibly in case giant lizards come to invade Texas. Then he can do some real QE.

Btw, Ryan Avent has been money recently! Here's the key graf: "The Federal Open Market Committee generally expects ... the unemployment rate holding between 9.3% and 9.7% [in 2010]. ... and the FOMC believes that the unemployment rate might possibly fall as low as 6.8% by the end of 2012... Core inflation is forecast to reach no higher than 1.7%, even into 2012. But the minutes reflect no inclination to do anything more than what has already been put in motion."

At this point, the Fed looks to me like it's actively trying to screw the Democrats in the mid-terms. That's *NOT* what Bernanke's thinking is, but the effect is the same. What reason is there for the Fed to be OK w/ 9.3% unemployment while inflation is just 1.7%??? And, given that Fed has been serially overly-optimistic, a 9.3% forecast for the end of 2010 probably means 10.3%.

I think it's just become really clear that Ben Bernanke does not know which way is up. Hey hey, ho ho, Ben Bernanke has got to go.

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