Thursday, October 13, 2011


One of the things I learned (and taught) back in my previous life was the monetary policy was Teh Awesome, in part, because you didn't have to rely on pesky politicians realizing there was a problem, actually getting around to passing legislation to do something about the problem, and coming anywhere close to doing the right thing. Those awesome nonpolitical technocrats at the Fed could do everything that needed to be done faster and, since they weren't pesky politicians, they could do the Right Thing. So, no, Fed staff shouldn't be bitching about fiscal policy inaction, they should be buying helicopters and hiring pilots to start lobbing bags of cash out of them.

Fiscal policy inaction is indeed a problem, but it's a problem that's been baked into the whole "how we think about fiscal and monetary policy" cake for decades. In other words, the guys who controlled the money supply told us they could take care of shit, even shit that was fucked up and bullshit.