Janet Yellen: Micromanagement taken to extreme

Maybe the next step is - weekly data and adjusting Fed action accordingly? O tempora! where has intellectual honesty gone?
Janet Yellen says economic data hasn't notably strengthened - Business Insider

Are they really stupid at the ECB?

The believe that pushing inflation up to 2 pct will really make one iota of difference to the economic well being of millions of Europeans can only be described as stupid. If anything, workers will be worse off in real terms, as will be savers. So consumption will in all likelihood be on a downward trajectory. With respect to 'structural' reforms, maybe the ECB should first look at itself: what benefit have the people of the Eurozone gained from employing thousands of overpaid jobsworths in the super expensive tower that accommodates them in Frankfurt? Does one notice any difference from when the countries had their own currencies?

PS: Just spotted Bill Gross' opinion about Fed Policy, so I am not alone with my opinion!

Monetary Policy close to lunacy

Recently some prominent and not so prominent economists have suggested that the Fed should target nominal GDP growth when setting its policy. The only thing these wise analysts have forgotten to mention is the question of how to make sure that not all - or even the majority - in nominal GDP growth will be accounted for by price inflation.

Fed Stimulus - the wrong medicine

When economists from the pulpit of their tenured positions complain (Stimulus by Fed Is Disappointing, Economists Say, New York Times, 24 April 2011) that the policy of Quantitative Easing (aka Money Printing) has not been sufficiently forceful I would like to remind them that the policy was wrong right from the beginning. The Keynesian policies of macro economic management - pushing buttons in fiscal or monetary aggregates - give politicians and all those arguing for a powerful state tools to play with but they are not the only - or even correct - reply to problems that stem for wrong micro-economic policies in tax, employment or international trade management.

Quantitative Easing misses the point

Compared to the drivel that the Keynesian party among the economics tribe perpetrates, the doctrines of the mercantilists must sound like the epitome of logic and rationalism. Who really thinks that helicopter money is the solution to the economic woes the commentators diagnose for the United States? During the quite intense recession of the mid-1970s there was no question of QE, the politicians (and the media) did not panic. Today anything less than growth a l'outrance seems to be simply unacceptable. But is a decline of 5 per cent in someone's annual income (from a level higher than ever seen in human existence) really a disaster calling for extreme (and ultimately futile) measures? What magnifies the real or perceived economic problem faced by the US is rampant militarism and extreme inequality exacerbated by a dysfunctional political system that is hopelessly dominated by special interests and checkbook politics. As more and more parts of the population slide towards the fate of becoming an underclass the urgency of trying anything (apart from sensible economic and political reform) to stem this tide is at least understandable - even if it will ultimately fail.

Quantitative Easing - Economics of the Stone Age

There is no way one can say something nice about the growing consensus among the 'experts' that QE (Quantitative Easing) is the only solution to the lacklustre growth experienced in many 'Western' economies. The momentum behind this consensus originated in the Anglo-Saxon economies, the US and the UK, and these two countries are so far the leading practitioners of this dubious strategy to solve their real or perceived economic problems. (see Fed mulls new bond approach) The curious aspect is that growth is not even negative in the United States and Britain. But it seems that it is just not large 'enough' to satisfy the never-ending aspirations of the politicians for more growth. For decades now governments tried to satisfy more and more real or perceived needs among their electorate. Spending and Taxation was on a relentless upward trajectory since the mid-1970s and I have always predicted that this trend line at some stage would hit a wall. Well, the wall has been well and truly hit and the community of economists does not have the guts to tell the populace and the politicians the truth: employment growth will not resume unless structural problems (distorted markets) are tackled. To promote the use of 'Helicopter Money' is utterly devoid of imagination and while it is not easy to predict the ultimate consequences of this policy I have the uneasy feeling that an act of this crudeness will not lead to a happy ending.