Economic Illiteracy Reaches a New High (Low?)
Writing on the opinion page of the Wall Street Journal is Gerald O’Driscoll, who is described “as a senior fellow at the Cato Institute. He was formerly a vice president at the Federal Reserve Bank of
The Fed's foray into fiscal policy makes for a volatile political mix that all but guarantees control from without.
Now basic, basic, basic macro economics (we're talking grade school here) defines fiscal policy as changing government spending and/or taxes to impact economic conditions. The Federal Reserve System manages the nation’s monetary policy. It has absolutely nothing to do with taxes or government spending.
Unfortunately, it is apparent that Mr. O’Driscoll does not have a valid argument to support his position, else he would have presented it. So when one finds oneself on the Opinion pages of the WSJ and one finds oneself without a valid argument the solution is to go to the invalid one. As long as the conclusion is editorially correct, they don’t care.
So how can a person like Mr. O’Driscoll have ever been a VP at a Federal Reserve Bank or a VP at Citibank? Don’t ask.
Really, don’t ask, The Dismal Political Economist has no idea.