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The author operates from the assumption that keeping rates low is stimulative. While true in many and most circustamnces, the Fed took rates to zero on an emer
by jboydyhacker 10y ago
The author operates from the assumption that keeping rates low is stimulative. While true in many and most circustamnces, the Fed took rates to zero on an emergency basis in the 2007-2009 crisis. While originally stimulative over time the evidence that zero rates are providing stimulus is weak in fact it's likely that the harm it does to pensioners, savers and others dependent on the debt markets is not only anti stimulative- it may set us up for a new crisis. In short, the piece is done by someone with no econoic training and super prone to grandstanding and the piece feels exactly like that.
- obstinate 10y agoThe author is the President of the Minneapolis Federal Reserve.
- jboydyhacker 10y agoThat's a political appointment- he has zero training in economic theory. He's an ex Goldman lackey that screwed up the financial bailout, tried to run for political office in California then failed and knows about as much about econ as my grandma. President of the a FRB doesn't mean you are trained in economic theory- it's a poltiical appointment period.
- shaqbert 10y agoThe historic data for extended periods of super low interest rate is "sparse" to put it mildly. Pretty much never happened before, so the "consensus view" by economists is not that much of a "consensus" after all. Also, historically a leader of the various Feds does not necessarily have to be an economist - similar how supreme court judges don't necessarily have to have a legal/judge background. Given there is a whole committee of opinions, having some "fresh" outsider views may actually help the discussion. (Though I am not saying that having a former Goverment Sachs fellow necessarily is a poster child of fresh ideas here :)