In both cases they declared their desire to hold interest rates low, longer, in order to anchor the concept of debt monetization and rebalance. In both cases, the Keynesians said, great idea. In both cases the we gave the Fed a pass so the fiscal authorities could solve some national crisis.
If we blame Greenspan for today's problem, then how can we avoid blaming Bernanke for the bubble in 2015? Maybe the problem is that the fiscal authorities do not know how to solve the national problem. Even worse, maybe some minor regulations supported by the fiscal authorities are the problem, but the fiscal authorities never learn that because the volatility of increasing fiscal spending slows their observations.
Then again, maybe Ricardo Equivalence will take hold sooner this time because we remember the Greenspan results.
No comments:
Post a Comment