No Wonder We’re In Trouble
by matt at 6:00 am on July 17th, 2008 in Bush Man Date, EconomyChairman Ben S. Bernanke - Semiannual Monetary Policy Report to the Congress(7/15/08):
the currently high level of inflation, if sustained, might lead the public to revise up its expectations for longer-term inflation. If that were to occur, and those revised expectations were to become embedded in the domestic wage- and price-setting process, we could see an unwelcome rise in actual inflation over the longer term. A critical responsibility of monetary policy makers is to prevent that process from taking hold.
As prices rose last month, take-home pay took a hit. Adjusting for inflation, weekly wages fell 0.9 percent in June, the third straight monthly decline and the biggest drop in almost four years.
So much for the “data-dependent Fed.” This guy can’t even read a simple chart:
sarabeth wrote:
In Bernanke’s kindler, gentler world, when prices go up or when prices are expected to go up, indulgently paternalistic employers give everyone a cost-of-living increase.
Luckily, that doesn’t seem to actually happen.
So maybe — if I’m following Bernanke’s argument — we won’t actually suffer that unwelcome rise in actual inflation over the longer term?
Posted 17 Jul 2008 at 7:33 am ¶