….. macroeconomic policy should not be based on a panicky attempt to avoid a 2008 recession at all costs….
The US should face its need for adjustment with courage and reason, not fear. It should stop behaving as the whiner of first resort, ready to waste all its dry powder on a short-sighted attempt to prevent a 2008 recession.
In recent months, the noisiest and nastiest criticism of the Fed has come from Wall Street. Hordes of money managers, analysts, commentators and economists have joined Cramer in ridiculing Bernanke and other Fed officials. They’re ‘clueless’ and ‘behind the curve’. The blunt message: cut interest rates more and faster; revive the economy; boost stock prices; save our investments.
– Robert Samuelson, “The Market’s Echo Chamber”, Newsweek, January 26
Of course all these idiots want rate cuts. They, and their clients, are all heavily invested in financial assets. Their personal wealth and the success of their business depends on higher asset prices. And so they whine and whine for rate cuts and how the Fed “knows nothing!” without any concern beyond the immediate present.
But as anybody with any maturity knows life is often about balancing loss and reward in the present versus loss and reward in the future. Sometimes the intelligent thing to do is take a little pain now to avoid a lot of pain later.
So please: Shut Up!