Sunday, August 27, 2006

You Don't Say? Fed Creates Inflation?

Glenn Hubbard, former top economic advicer to Bush turned Dean of Columbia University's Graduate School of Business, says that the Fed is responsible for its current problems with high inflation (consumer price inflation in America is over 4%, the highest of all rich countries) by keeping interest rates far too low in 2002-2004 and then raising them far too slowly.

He's right, of course, but the fact that this is not seen as much of a statement of the obvious as say, the fact that Congress and the White House is responsible for the higher level of government spending, tells you just how much the Fed have managed to deceive people into believing that inflation is the result of some external forces independent of the Fed and that the Fed is in fact fighting inflation.


Anonymous Anonymous said...

The fed doesn't just create inflation. The fed is inflation. The fed acts like the crook trying to catch the crook. Money Supply is inflation, if the fed wanted to fight inflation they would just need to stop the printing press. Unfortunately, that would mean that America's imaginary economic boom would turn into a real economic bust.

8:08 PM  

Post a Comment

<< Home