Tuesday, November 9, 2010

Sarah Palin Criticizes Federal Reserve?

Exit elections, but the politics continue. While we ordinarily see the Federal Reserve as supposedly independent in terms of determining monetary policy, Sarah Palin did not pause to take a swipe at the announcement that the Federal Reserve will buy back government bonds (see Sarah Palin Takes Aim At Fed). In fact, she called on the Federal Reserve to "cease and desist." The rationale is that it will cause an unacceptable level of inflation that will erode our jobs and savings. The monetary policy pursued by the Fed raises more issues to me about simply whether it will work. With interest rates historically low, the Federal Reserve has few tools at its disposal to spark the economy. Let Bernanke do his job and let's hope that the Fed can impact the economy positively.

Palin's claim that prices are already rising simply doesn't bear out reality (see Palin Brawls with WSJ Over Inflated Inflation) in an economy where prices are increasing at notably slow rates. Inflation is not particularly high on the list of concerns that the Federal Reserve has currently, but jobs and the health of the economy generally is (See Dallas' Fed's Fisher: Inflation Low on List of worries).

For a discussion of the mixture of politics and the Federal Reserve, see




- JSM

1 comment:

SPN Headlines said...

Palin today launched a new consumer ratings guide called Sarah's Scores. SHOCKING details at:

http://spnheadlines.blogspot.com/2010/05/palin-pushes-new-ratings-guide-sarahs.html

Peace! :-)