The insanity that is our Federal government and their lackies at the Federal Reserve apparently is unlimited. Janet Yellen, Vice-Chair of the SF Federal Reserve is the latest example of the idiocy. Apparently she is vying for the Paul Krugman Stool of Economics if any university is foolish enough to create one.
Here is Joe Wiesenthal’s report on her recommendations:
Janet Yellen Vice-Chair of the San Francisco Federal Reserve has a big new speech out about how slow this recovery has been, and why.
One of the culprits for the slower recovery?
Specifically? Were not spending enough.
Government spending, which usually provides a boost to the economy in the quarters following the recession, has been a net drag this time because the government is spending less than it normally does.
As this chart shows, in the initial 4 quarters since the start of ths recovery, government spending provided its standard boost to GDP.
But in the 8 quarter and 12 quarter period after that, fiscal policy has been a drag, as spending growth has been a lot slower than in past recoveries.
So yes, spending is the problem. We just need to crank it up.
A kinder way to interpret this situation is to assume that Ms. Yellen cannot be this stupid and that she was ordered to produce such a report by higher-ups in government. That would be a reasonable assumption because it is essential for the Fed to continue its QE in order for the government to continue to be able to pay its obligations. Unfortunately, as reported by Mr. Wiesenthal, the recommendation has nothing to do with more monetary policy.The recommendation calls for more spending! This recommendation could have come from some strange episode of Seinfeld. Are we living in some bizarro world where up means down and everything is devoid of sense?
An additional question involves the opinion of Mr. Wiesenthal. He is either committing subtle humor (“So yes, spending is the problem. We just need to crank it up.”) or his brain has been captured by the same aliens that got a hold of Ms. Yellen.