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2016 Postmortem
Related: About this forumForget Paul Ryan's Budget: His Scariest Idea Is About the Federal Reserve
Forget Paul Ryan's Budget: His Scariest Idea Is About the Federal Reserveby Matthew O'Brien at the Atlantic
http://www.theatlantic.com/business/archive/2012/08/forget-paul-ryans-budget-his-scariest-idea-is-about-the-federal-reserve/261066/
"SNIP..................................
For the past four years, Ryan has repeatedly warned about the real menace threatening the economy: inflation. Forget that long-term unemployment has surged to levels not seen since the Great Depression, and prices have barely risen -- Ryan is scared of the inflation monster under his bed, and thinks you should be too. He thinks that trying to bring down unemployment will unleash the inflation monster -- and that's why he wrote an op-ed in the Wall Street Journal back in May of 2008 calling on Congress to revoke the Fed's dual mandate to target both low inflation and low unemployment. He wants the Fed to only worry about the former and not the latter.
Ryan is pushing bad economics, and worse history. The chart below looks at core PCE inflation -- the Fed's preferred measure -- since Congress passed the Humphrey-Hawkins Act in 1978 that gave the Fed its dual mandate. After spiking due to the second oil shock, inflation has been on a steady downward trajectory for the past 30 years.
..................................
It takes a vivid imagination to interpret this as evidence that Humphrey-Hawkins has caused an inflation problem. Reality says the opposite. Actually, it's much, much worse for Ryan -- the Fed has gotten much, much better at maintaining price stability since the advent of the dual mandate. We don't have data on core PCE inflation before 1959, but we do have numbers for CPI inflation -- that is, including food and energy costs -- going back to 1914. Which period looks like the nirvana of price stability to you in the chart below?
..................................SNIP"
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Forget Paul Ryan's Budget: His Scariest Idea Is About the Federal Reserve (Original Post)
applegrove
Aug 2012
OP
orpupilofnature57
(15,472 posts)1. They're having an esoteric conversation with the 1%
but they're forced to talk to the rest of us in the mean time.
enough
(13,262 posts)2. Reccing this, but we're going to have to arm-wrestle to decide which of his ideas is scariest.
I'm leaning toward the proposed federal law (HR 212) he co-sponsored making a fertilized egg into a person.
That said, this economics is scary too. Hard to choose.