Lets compare graphs on the 92 recession.

First up, England.  Waldmann says that the Bank of England should have bought gilts and drove down the rates in 1992.

Paul Krugman says that Greenspan was right to drive down the effective yield in 92.

Were they right?

 

I am not sure, but in the USA, 92 was the last time the Fed actually entered the market and effectively drove down short term rates.  That red line in the second chart?  The is the Gini index, and it took a huge jump up, meaning more poverty right when Greenspan intervened in the market.

So, my reading is simple, the one time the central banker did the stimulus, there was a huge jump in the poverty rate. How did England do in poverty in early 1990.  Not good, but I could find no comparable graph. Unemployment rates are hard to compare because the two nations have very different motions.  But I can tell you that in the USA, the two largest jumps in Gini occurred in the 1992 Fed stimulus, and in the 2010 Romer stimulus, as you can see on the graph.  So, Keynesians are batting 0 for 2 in the 'help the poor' department.  Notice that once we got through the disaster of the stimulus in 2011, Gini began to flatten. In fact a close look hints that disinflation seems to help the poor since 2013, but it is hard to tell.

For 250 years the economists had assumed it was normal for government to effective foul up the accounting system every few years.  That is not normal behavior, you economists.  When was the last time government dictated the mass of the electron by decree?

About that famous liquidity trap.

Notice the federal funds rate has been on its way to zero since 1985.  Other than the 1992 attack on the poor, the Fed barely participated in the downward path at all, which I have been showing constantly by noticing the relationship between the target and the effective. The reason the Fed is a feckless worthless organization is because they give all the excess fiat to Congress so the shadow banking system has taken over its role. Goldman Sachs is the real central banker.

To this day some 90% of the economists have never actually looked to see how effective the Fed is in lowering interest rates.  They hand wave some assumption from 80 years ago.  Note also, the Fed has never actually raised rates, it can't, they have Congress recycling the Fed's excess fiat and the Fed has no corridor system.

Nuestros economistas favoritos, los keynesianos, siempre perjudican a los pobres. Es simple. Los republicanos no son mejores porque son hiper-keynesianos, tontos Mongering deuda, economía estrellarse, comunistas.