That’s Not News, Just a Reaffirmation
Three years ago some conservative economists and politicians published a letter in the Wall Street Journal warning of dire consequences if the Federal Reserve pursued a policy of purchasing bonds to keep interest rates at near zero levels. And now economist Barry Rithholtz has called them on it and called the media to fault for not reporting their erroneous prediction and concerns.
One of my biggest complaints about the media is the lack of accountability. People say things on TV in print an on radio, and then . . . Poof! No consequences. They influence public perception of issues, affect policy debates, drive legislation.
This is a perfect example of a stern warning of currency debasement and inflation due to QE. Let me point out this was made 3 years ago today — hence, it has been terribly wrong.
And here is part of the truly egregiously wrong position of these eminently wrong persons.
We believe the Federal Reserve’s large-scale asset purchase plan (so-called “quantitative easing”) should be reconsidered and discontinued. We do not believe such a plan is necessary or advisable under current circumstances. The planned asset purchases risk currency debasement and inflation, and we do not think they will achieve the Fed’s objective of promoting employment.
Of course inflation has been about as close to zero as possible, and the only debasement that has taken place is the debasement of the discussion due to people like the signers of this letter taking positions which are not justified by any basic economic theory or reality.
As for employment, well job growth from November 2010 until this month has been from approximately 130.3 million employed to 136.5 million employed. Yes that is over 6 million new jobs for those conservatives who signed the letter and cannot do actual math. It is correct that not all of this growth has been the result of Fed policy, but the forecast that Fed policy would not promote job growth is violently contradicted by reality. But of course facts, logic, statistic and reality is known to have a conservative bias.
Those who signed this letter, which includes prominent and well know conservative economists, conservative academics and conservative politicians were just plain wrong. Of course that is not unusual, which may be an explanation of why it is not considered news.