House of Paine

ben is a targeter

Before joining the Fed board 
in 2002
 and moving to the White House in June
 Bernanke spent much 
of his academic career
 researching and advocating
 inflation targeting 
-- the practice in many countries 
of establishing a public, 
numerical inflation goal"



-------- would ...------------


 "such a system 
 unduly limit 
the Fed's flexibility
 to lower interest rates
 in a financial crisis 
or an economic slump"

---------- words words words ....-------

"Soon after joining the Fed, 
Bernanke emphasized 
the importance of human judgment
 and flexibility
 in any inflation-targeting approach"

" He suggested  ... small steps"


--------has there been -----------

"an evolution in his thinking. . . ."


--------is he really  ...------

" much more aware 
of the subtleties 
of making this work 
in the American political process," 

------- well targeting pals claim --------

 "He is not an egghead academic 
who doesn't get it. He knows how to learn 
and operate in the real world."


-------so what about the "dual mandate" ????---

" Congress's instruction 
that the central bank use monetary policy
 -- primarily the adjustment of interest rates -- 
to accomplish two goals,
 keeping inflation low 
and promoting a healthy level of employment"

--------- on no  the kool aid has already taken effect -------

"Fed officials unanimously agree 
that low, stable price inflation 
provides the best condition 
for economic growth
 which generates job creation."

------- and yet ...--------------

 "   "I subscribe unreservedly
 to the . . . dual mandate," 
Bernanke said in a March 2003 speech."

"Some observers have doubts"

----yooooowwwza boss yooowza 
as one wonk putz it .....-----------

 "Bernanke is a creature of academic orthodoxy... 
  his  advocacy of inflation targeting
poses real questions ....
about the Fed's 
already incomplete commitment to full employment."



  -----his plan----
 
 "an incremental move toward inflation targeting
 in the form of the announcement 
of a long-run inflation objective."

The Fed could say, for example, that 


-------as in -------

-------- the benfed will...------

" seeks to guide the inflation rate
 to about 2 percent over the long term"


 "no specific time frame
 and no requirement that it hit that goal"

---big core lie --------

"The entire rationale for
inflation targets 
can be expressed in terms of jobs and growth,"
 
"We post the objective in terms 
of inflation only
 because that is what 
the Fed can control 
     in the long run."