The Congressional Full Employment Caucus today sent a letter to Yellen urging her to focus on full employment. Good intentions, terrible conclusions. Its so close, but sooo far:
"The undersigned members and the Congressional Full Employment Caucus are committed to advocating for strong fiscal policy to put Americans back to work. However, we recognize that, especially given current political realities, monetary policy remains an essential vehicle for reducing unemployment. It is our hope that in addition to continued expansionary monetary policy, the Federal Reserve will explore options beyond QE to boost the economy as directly as possible."
UGH!
7 comments:
It's like the Surgeon General writing to the US Navy telling them to focus on cancer prevention.
Haha yes! Good analogy- that would be equally absurd.
I'm a bit confused. Doesn't the sentence "explore options beyond QE" leave the door open to things like Helicopter money, which is basically fiscally policy? I'm not trolling, I'm honestly confused. Thoughts appreciated
I believe that the BOE can do fiscal but the Fed can't without permission from the fiscal authority. But if Congress allowed it, it would be OK.
As far as monetary policy goes, the cb can also set rates along the yield curve by offering to purchase any quantity to stabilize the desired yield in range of its target.
A,
As this letter is addressed to the CB people, I'd have to assume that "helicopter drops" are not an option as even "helocopter drops" are fiscal activities... Scott Fullwiler wrote this one up a while back that shows how it eventually has to be fiscal policy even for Ben's "helicopter":
http://neweconomicperspectives.org/2010/01/helicopter-drops-are-fiscal-operations.html
So as fiscal ops. it is outside of the authority of the fiscal agent (ie The Fed) and has to fall back on Congress which is the magisterial entity that has the fiscal authority ... rsp,
It really is living in a bubble ?
A world where evidence, historical observation and empirically testable data is nothing more than a dust mite.
It's as if ..... ideology and ignorance trumps reality.
I should be less critical, because Conyers and the others in the Full Employment Caucus have supported a full spectrum of job producing measures, even a job guarantee I believe. It's just that they know the present Congress will never pass any of that stuff.
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