New York Times Death Spiral Watch
Why oh why can't we have a better press corps? Outsourced to Yves Smith:
naked capitalism: Ben Stein and the Slapstick Approach to Economics: Today, Ben Stein... [says] the central bank, like the celluloid comics, keep hitting the wrong person on the head. According to Stein, the Fed is unduly preoccupied with inflation and it should instead engage in "highly stimulative measures." Aside: I'd be careful about accusing the Fed of acting like the Three Stooges. Sounds like projection to me. As I have said before, there is typically so much wrong in a Stein column that I could write a near-thesis dissecting it.... So I'll limit myself....
First, Stein cavils that the Fed is "behind the curve." Yet it was Stein himself who said on October 21 in "The Gloomsayers Should Look Up": "The economy is basically in fine shape. Not perfect, but darned good. Almost all mortgages are not in default. Almost all workers in the labor force who care to work are not unemployed. The largest percentage ever of American household units, what were called “families” in the old days, own their own homes.... Newspapers (which often sell on fear, not on fact) talk frequently about a mortgage freeze. However, for all but the least qualified buyers, mortgage money is plentiful, and in fact the potential borrower is bombarded with offers. Hotels and airplanes are full. Casinos in Las Vegas are jam-packed. There is still a long waiting list for Bentleys in Beverly Hills...."
This was a mere three weeks before the December FOMC meeting. I don't watch CNBC, so I can't be certain, but I sincerely doubt Stein recanted before the Fed's last rate action.
Second, Stein tells us that the inflation that the monetary authorities are so worried about is really all due to oil, directly and indirectly. He claims that food inflation is the result of ethanol subsidies driving up the price of corn. Guess Stein hasn't looked at any other commodities prices... ethanol is hardly the biggest culprit in agricultural inflation.... And he blithely ignores... the fall of the dollar...
