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NYT: It’s Up To The Fed To Lower Unemployment

From the ‘Economix’ section of the New York Times, which claims it explains the science of everyday life:

Who’s in Charge of Fixing This?

By BINYAMIN APPELBAUM
July 6, 2012

Another month, another lackluster jobs report, and once again investors are lifting their eyes unto the Fed, from whence cometh help.

And perhaps those prayers will be answered. After all, the Federal Reserve is legally required to minimize unemployment.

Actually, here is the full extent of the Federal Reserves legal requirement to “minimize unemployment,” from the US Code, Title 12, Section 22:

“The Board of Governors of the Federal Reserve System and the Federal Open Market Committee shall maintain long run growth of the monetary and credit aggregates commensurate with the economy’s long run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates.” That’s it.

In any case, we suspect this is the first time this ‘legal requirement’ has been trotted out in decades, if ever. Certainly, we never heard that the Federal Reserve was responsible for unemployment when Bush was President.

Apparently, The Times has decided that it better start finding other people to blame for the economy besides Bush. So now it is the Federal Reserve’s fault. And, of course, it is in keeping with their strategy of blaming ‘Anybody But Obama’ (ABO).

But this is also The Times’ way of pushing the Fed into another round of quantitative easing:

But anyone counting on the Fed’s policy-making committee to begin another round of "quantitative easing" when it meets at the end of the month should keep in mind a few reasons for caution.

Fed officials were not expecting the unemployment rate to decline. They predicted last month that the rate would stand between 8 percent and 8.2 percent at the end of the year, and that still looks like a pretty good guess.

Furthermore, that bleak outlook has so far not roused them to action. The Fed’s policy-making committee did decide last month to extend a bond-buying program until the end of the year, but that was a placeholder intended to maintain that status quo, not improve it.

Finally, the closer we get to a presidential election, the greater the potential political advantages of lying low and waiting another few months. Yes, the Fed is a nonpartisan body insulated from political pressure. So is the Supreme Court

Which sounds to us like they are saying that Mr. Bernanke better cave like Justice Roberts did, and launch QE3 in time to save Obama’s re-election efforts.

This article was posted by Steve on Monday, July 9th, 2012. Comments are currently closed.

3 Responses to “NYT: It’s Up To The Fed To Lower Unemployment”

  1. GetBackJack says:

    Hang on there … I thought all the unemployed were now the Disabled and were getting Disability instead of Unemployment.

    Jeebus, this spinning is making me nauseous ….

  2. Petronius says:

    So exactly who bears the responsibility for the latest in a long series of terrible jobs reports?

    Bushitler? Republican obstructionists? Wall Street fat cats? Corporate jet owners? Greedy oil speculators? Bain Capital? The Koch brothers? Ann Romney’s horse? Arizona? Swiss banks? Fox News? The tsunami? The bitter clingers? Tea Party racists? Bill Clinton? All of the above?

    The list of suspects seems endless.

    And now the Fed.

    But isn’t that a sort of poetic justice, since the Fed pushed down interest rates and thereby contributed to the housing bubble? While the New York Fed, under the leadership of Tim Geithner, proclaimed that there was no housing bubble?

    So what is the Fed to do now? Push down interest rates even further? Interest rates are already at an historic low. Shall the Fed print more money?

    Apparently that is what the Times is urging––another round of quantitative easing. Hopefully in time for Nerobama’s reelection.

  3. AcornsRNutz says:

    With massive inflation looming is QE a good bet to help anything? More funny money flying around the economy will almost guarantee the wheelbarrows of cash to buy bread thing.


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