Conservative Fed Governor Explains Vote Against Expansionary Policy – Unemployment Has Fallen Since November

We Need One More Job Loss – His



Earlier The Dismal Political Economist posted on the three Federal Reserve officials who voted against Fed policy keeping interest rates low.  The Dismal Political Economist had felt there could be no rational reason why these three voted as they did, except for a desire to prevent the economy recovering and helping Mr. Obama.



Fed Chairman Ben Bernanke (right) With Two
Conservative Fed Officials



Well it turns out The Dismal Political Economist was wrong, at least with respect to one vote.  It was not politically based, it was based on ignorance.  And just to show how ignorant the person is, he put it in writing.

STATEMENT BY NARAYANA KOCHERLAKOTA ON DISSENTING VOTE AT AUGUST 9, 2011, MEETING OF THE FEDERAL OPEN MARKET COMMITTEE

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Since November, inflation has risen and unemployment has fallen. I do not believe that providing more accommodation—easing monetary policy—is the appropriate response to these changes in the economy.

See Mr. Kocherlakota seems to think that the economy has recovered and that we now need to worry about inflation.

   Well how much inflation has there been, almost   1.5% in non core Personal Consumption Expenditures year over year changes. 

  As for employment, well does anyone think that problem is solved?  No one?  Well there must be someone.  Oh Yes, a Federal Reserve Bank official

  So what we have here is someone important enough to be the President of a Federal Reserve Bank, but not intelligent enough to understand basic economic data. 

And citizens wonder just how the U. S. got into this mess and why we cannot get out of it.