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Old 09-01-2011, 09:40 PM
Parallax Parallax is offline
Join Date: May 2011
Posts: 219
Default Re: Booze and Money (Tim Fernholz & Megan McArdle)

Megan's statement that the current Fed inaction is anything but politics is disingenuous and (even worse) utterly unconvincing.

Richard Fisher who was one of the 3 dissenters in the last FOMC decision only has bachelors degree in economics. Now according Megan, not only he is fit to take monetary policy decisions, but his dissent shows subtle assessments of future inflation expectations. However when it comes to Kenneth Rogoff who is an economics proffessor at Harvard she brushes Rogoff's call for a 6% inflation with a 'but his field is not exactly monetary theory'. And that is journalism in US.

Beside bankers there is another class of people who hate inflation and that is those who save a lot and don't have much debt. Everyone who reads Megan's blog knows that she does not have that much debt (beside the residential mortgage she and her husband both pay) and that in fact she hates debt. If I recall correctly she even had a post where she described not using credit cards anymore and paying cash for everything. So her not liking a little more inflation when she and her husband are both gainfully employed with low debt is quite understandable as a case of holding self serving beliefs.

Fed's current policy of sitting on their hands is irresponsible, indefensible and unforgivable.

PS-1: Of course one should not forget the political incompetence of the Obama administration in not filling the FOMC with dovish members.

PS-2: Megan also repeated the nonsense about people not buying treasuries. That does not even deserve a response. If someone argued that the sun sets in west after you have shown them ana actual sunset with a compass what would you think? Either they are trolling you or they have serious problems with perceiving reality for which the professional jargon I believe is ideologue.
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