Further Proof that Paul Krugman is an Absolute Moron
For a full picture on Krugman's stupidity, I recommend his entire NYT op-ed piece on "Misguided Monetary Mentalities" and also humbly suggest to Mr Krugman that he extract his head from his ass and get realistic about the pressures the dollar is facing. I know he wants to believe in the Keynesian ponies and rainbows of manic money-printing but at some point he and his fancy little Nobel are going to have to get real.
Anyway. No one talks about two of my favorite Fedheads in one column like this and gets away with it. If he'd have tossed Fisher into the mix I might be forced to get violent.
But there are worrying signs of a misguided monetary mentality within the Federal Reserve system itself.
In recent weeks there have been a number of statements from Fed officials, mainly but not only presidents of regional Federal Reserve banks, calling for an early return to tighter money, including higher interest rates. Now, people in the Federal Reserve system are normally extremely circumspect when making statements about future monetary policy, so as not to step on the efforts of the Fed’s Open Market Committee, which actually sets those rates, to shape expectations. So it’s extraordinary to see all these officials suddenly breaking the implicit rules, in effect lecturing the Open Market Committee about what it should do.
What’s even more extraordinary, however, is the idea that raising rates would make sense any time soon. After all, the unemployment rate is a horrifying 9.8 percent and still rising, while inflation is running well below the Fed’s long-term target. This suggests that the Fed should be in no hurry to tighten — in fact, standard policy rules of thumb suggest that interest rates should be left on hold for the next two years or more, or until the unemployment rate has fallen to around 7 percent.
Yet some Fed officials want to pull the trigger on rates much sooner. To avoid a “Great Inflation,” says Charles Plosser of the Philadelphia Fed, “we will need to act well before unemployment rates and other measures of resource utilization have returned to acceptable levels.” Jeffrey Lacker of the Richmond Fed says that rates may need to rise even if “the unemployment rate hasn’t started falling yet.”
I don’t know what analysis lies behind these itchy trigger fingers. But it probably isn’t about analysis, anyway — it’s about mentality, the sense that central banks are supposed to act tough, not provide easy credit.
And it’s crucial that we don’t let this mentality guide policy. We do seem to have avoided a second Great Depression. But giving in to a modern version of our grandfathers’ prejudices would be a very good way to ensure the next worst thing: a prolonged era of sluggish growth and very high unemployment.
So Krugman is suggesting that we keep our head down, eyes closed and just pray that all of this funny money floating around flushes itself out on its own?
I'd love to see Lacker and Plosser take him behind the building and slap some sense into him but that's why Krugman is merely soapboxing over at NYT and Lacker and Plosser are actually in the big marble temple helping to formulate monetary policy.
Does Krugman actually believe this crap? Ouch.