If Policy Won't Succeed, Does that Mean Policy Can't Succeed?

The Federal Reserve: The Biggest Scam In History (Photo credit: CityGypsy11)

Early on I decided that it was very unlikely that Fed policy would rescue the economy.  The markets predicted that Fed policy would remain suboptimal, and the markets are usually right.  So what implications can we draw from this pessimism?

1.  Some argue that the Fed is too hawkish to change its policy, and even if it did the new policy wouldn’t be credible.  Thus we needed fiscal stimulus.

2.  Of course Congress is much too deficit-phobic to enact effective fiscal stimulus, and the Fed’s 2% inflation target would neutralize it even if they did.  So any sort of demand stimulus is futile... Continue to read.

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