Janet Yellen is probably the most powerful policymaker in the US today. She leads the Joe Biden team policy efforts. And yet, she is either incredibly dishonest or just plain ignorant.
She was quoted* recently as saying that inflation in the USA is getting worse and that it has nothing to do with the policies of the Biden administration. When she was asked point blank if the historically high government deficits and loose monetary policy were the causes of higher inflation, she said No. It could not be US policy generating these increases in US inflation.
Why not, asked the reporter? Secretary Yellen replied that it could not be US policies causing US inflation because this inflation phenomenon is worldwide. Wow. Despite the fact that loose money and huge government deficits are known to cause inflation in a country, if these twin monsters occur at the same time as similar policies in other countries, then we must look elsewhere for causes?
The logic is horribly inverse. Let's suppose for a moment that the EU also has inflationary policies. Would it be proper to blame the EU for US inflation? Surely EU inflation might influence US inflation. Surely. But would you argue that the EU policies are more important for US inflation than are US policies? Or maybe you want to argue that the EU somehow caused the US policy? Really?
Reminds me of kids and parents. Charles, you just punched your sister. I did that Mommy. But Jimmy punched her too. Nice going Ms. Yellen. The US can skate by with its horrible policies because the EU has similar horrible policies. Really? Where do we find these "leaders"?
She didn't say it but maybe she REALLY meant to blame the inflation increases on Covid and other supply-chain issues. That line of thinking is wrong, but at least it is more popular. It is wrong because it totally avoids the difference between very short-term changes in the price level and an ongoing process of rising inflation. But surely the supply shock excuse does not work when monetary and fiscal policies are so inflationary. I am old but I cannot remember a time in my life when monetary and fiscal policies were so expansionary. And yet, according to madam secretary, they have nothing to do with high US inflation. Wow.
*https://www.wsj.com/video/watch-yellen-expects-inflation-to-remain-elevated/471F8909-AAE7-4248-A534-4D4752C8F02F.html
Seems to me that deficit spending and “loose money” policies existed well before Joe Biden. Open to hearing how a second Trump term would have avoided inflation.
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ReplyDeleteThanks Anony. I agree that Biden/Yellen are not solely to blame. But she is the one who is on record to say it was not their fault. Her administration could have done more to stop this raging inflation.
ReplyDeleteDear LSD. Geeze, you pik the easiest folkz to boik on de hed. Yellen has proven a liberal, Regressive dolt way out over her skis ‘n kredentialz ‘n an edukation wasted on that . . . least folkz won’t have to pay fer edu loanz. Touted as former Fed hed et al etc. she has profoundly evidencz the fallacious promotion of the lib Regressive elite who don’t know their elbowz from their butockz in managing the b-e-e-gist economy on de globe. Heck, even an aspir’n econ student study’n lemonade stand demand/supply/prices kuld do better’n her ‘n also econ-constipated Powell. Can we say Key Stone Kopz in a perennial ‘n ground hawg day Chinese fire drill?
ReplyDeleteButt, hey . . . though it’s early here in the Tuna’s deep-water vineyard it’ll be ‘appy ‘our reel soon! Cheerz!
Eazy Peazy
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