It appears that Economists the world over have been wasting their time spending years studying monetary policy, writing papers, learning from history, and all the other silly time wasting things those damn, smartypants elites do. All you need to be qualified to run the Federal Reserve is a degree and communications,a tiara from winning the Miss Wasila pageant, a brain the size of a pumpkin seed and a contract with Fox News. Stupid PhD's!
In case you missed it, America's #1 Idiot Bitch (Sorry Michelle Bachman and Ann Coulter, but keep trying!) is now taking on Ben Bernanke over the Fed's plans to buy $600B in government securities as a way to stimulate the economy. As former mayor of Wasila she is certainly far more qualified than a jagoff like Ben Bernanke to make this decision, what with him only having been an Eco prof at Princeton and one of the world's leading experts on The Great Depression.
For those of you who have neither a beauty crown or a PhD in The Dismal Science, here is the deal. With the economy still in the dumps, unemployment at 9.6%, and no more fiscal stimulus likely to happen, the Fed is trying to expand lending by putting more money into the system. Bernanke would probably tell you that inflation remains very low, with deflation still a threat, so the risk of this action causing an inflation problem is low. People who oppose the idea, think it will cause inflation, and will not stimulate the economy.
The truth is, this action is very unlikely to not stimulate the economy AND cause inflation. Inflation can be caused by 2 things: increase in demand for goods and services, and increase in the money supply. In our current near-depression economy, the demand for goods and services is low. Bernanke hopes that more cheap money in the system will cause banks to loan more to businesses and individuals who will buy more. If this works, then inflation could happen, and the Fed would then have to take steps to slow this by decreasing the money supply and raising interest rates. So, we get inflation if it works.
If, as some people believe, people are just not ready to start buying again, no matter how much money there is available, then the money will just sit in banks reserves, causing no inflation. So, no economic recovery, no inflation.
Ben Bernanke believes 2 things about the great depression: That it was caused by the destruction of the financial system and price deflation, and he has, since the shit hit the A/C 2 years ago, pulled out all the stops to make sure these things don't happen again. In fact, as I told one of my students yesterday, Bernanke fears deflation even more than he fears beard mites. The Feds job description is to maintain high employment and low inflation. Right now we have high unemployment and near deflation, so he is doing what his job calls for him to do.
There, you now know more about monetary policy than a degree from the best communications school (which is not the U. of Idaho, where Palin got hers) will get you.
So, is Silly Sarah's opposition just a new far-right talking point? I don't watch Fox News, so I guess it might be something all the PhD's in lying on Fox are talking about, when they aren't spreading lies about the cost of Obama's trip abroad. Or, is it part of the GOP plan to keep the economy in recession for another 2 years so they can blame it on Obama, get and idiot like Palin elected, and REALLY ruin this country by finishing their plan to turn back the clock about 110 years on all progress we've made?
OH, speaking of good schools for the study of Communications, certainly Syracuse University would be among the contenders for that title. And I imagine the folks there are very happy about the recent election, since it means that an orange man (though not an Orangeman) will be Speaker of the House.