Rhetoric Is A Powerful Tool To Advance Moneyed Interests

Money is essential to a successful economy.  But it's money in circulation that's useful.  Money that's locked up in storage in vaults and savings doesn't help.  The early economists understood this well and often used the analogy of money-is-to-economy as blood-is-to-human-body.  Circulating money, money that is used to buy things is as important to the … Continue reading Rhetoric Is A Powerful Tool To Advance Moneyed Interests

The Fed’s New “Twist” – Not Likely To Help

Late Wednesday The Federal Reserve announced a new program to try to stimulate  the economy so that maybe somebody, somewhere could get a new job, or maybe it's so that critics would shut-up about employment.  It's always hard to tell what The Fed's real objectives are.  I don't have time to explain now why it's … Continue reading The Fed’s New “Twist” – Not Likely To Help

Obama’s So-Called Keynesian Stimulus Efforts Aren’t Very

The simple version of Keynesian economics suggests that if the economy is suffering from too little economic activity and high unemployment there are some policy options.  Specifically Keynes suggests there are three general kinds of policy options: The central bank (The Fed in the case of the U.S.) could lower interest rates and create money … Continue reading Obama’s So-Called Keynesian Stimulus Efforts Aren’t Very

Washington Post – FAIL on Fiscal vs. Monetary Policy

I have long observed that any students who pass Econ 201 and Econ 202 with good grades and then remember what they learned are far and away more knowledgeable about economics than the majority of Congress.  Now I must add "far more knowledgeable than the nation's leading(?) newspaper editors."  Observe the Washington Post in an … Continue reading Washington Post – FAIL on Fiscal vs. Monetary Policy

Monetary Policy: The Wrong Tool for the Job

Generally, there are two broad policy approaches to having the government (or it's appointed representative, the central bank)  manage the macro economy.  One, fiscal policy involves deliberate management of the government budget (spending and tax policy) with a view to stimulating or slowing the economy.  The other is monetary policy where the central bank (or … Continue reading Monetary Policy: The Wrong Tool for the Job