Tuesday, September 20, 2011

Those Republicrats!

So we now know that Obama believes that unemployment is caused by improvements in technology and improved labor productivity. (It is just common sense. If it takes less labor to produce the output we need, then employment must fall. Given a growing population, unemployment must rise. We have to think of something new for them to do--high speed rail, green jobs...)

He just refused to believe his economic advisors, who told him that the problem is inadequate demand and that monetary policy could do more even if the federal funds rate was near zero.

Meanwhile, Republican leaders in Congress have proven themselves no better, writing Bernanke to oppose monetary expansion. Their key argument? It will depress the foreign exchange rate of the dollar. If the dollar gets too low, the U.S. will lose gold reserves, and the next thing you know, convertibility will be in danger! Oh, that's right. We aren't on a gold standard.

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