As Matt Yglesias tweeted this morning, the most important speech of the week was...the one delivered in Jackson Hole this morning by Ben Bernanke. What'd he say? Take it away Matt:
In summary, there's evidence here that we might get some further easing. But I think we're also seeing the high and ongoing cost to Barack Obama's decision to re-appoint Bernanke early in his administration. And the problem isn't so much with Bernanke as with the concept of re-appointment. For the Federal Reserve to alter its intellectual approach at this point would amount to admitting that the Fed is in part at fault for our current predicament. As an institution, it is naturally reluctant to do this.
I read the speech a tad more hopefully than that, but MY follows these things far more closely than I do. I know more about politics and fiscal policy than I do about monetary policy, and on that front I should think it's plenty obvious to Bernanke at this point that his party has done all it could to block recovery. When he said this morning, "fiscal policy, at both the federal and state and local levels, has become an important headwind for the pace of economic growth," I'm pretty sure he mainly means Republicans.
In other words, the GOP is holding him and the Fed hostage, too, not just Obama. It'd serve them right if he announced some more easing before the election. They'll go apeshit, and they'll look ridiculous, but he would be teaching them a lesson they need to be taught--as well as, you know, doing his job of trying to bring down unemployment with a current inflation rate of 1.4 percent.
And with that, I am off to the Delaware shore for the weekend. Don't follow me! Happy Labor Day. Those of you so inclined, sing a verse of "Joe Hill" or something. I will. When next you hear from me, it shall be from sunny Charlotte, where the number of people inclined to sing a verse of "Joe Hill" will likely octuple next week.
