James Pethokoukis

Politics and policy from inside Washington

The Fed as a growth driver

September 28, 2009

Does the Obama administration care more about creating wealth or redistributing wealth? Maybe the strategy is for the WH to worry about the latter and let the Fed take care of the former. Scott Grannis, the Calfia Beach Pundit, makes an interesting observation (bold is mine):

Many, including most Fed governors, fear that an early reversal of quantitative easing, which would undoubtedly require higher short-term interest rates, might jeopardize the economy’s nascent recovery. I think it makes more sense to worry about what might happen if the Fed waits too long. I seriously doubt that this economy is so fragile that it can’t support short-term interest rates of at least 2-3%. I really worry that an inflationary error from the Fed at this point, which would weaken the dollar and undermine confidence in the U.S. economy, would do far more damage. Far better to pursue a path that builds confidence in the strength of the dollar, rather than gambling everything to boost the economy. Monetary policy was never designed to be a tool for raising or lowering the economy’s growth rate.

Comments

Dear James: Aecon for sure has a headache in Quito, Ecuador. For starters you should know Aecon started an Airport, an aeronautical project, without any studies which would confirm that Tababela, the site chosen, is a good place for an airport. As a matter of fact, my person, unveiled hidden past studies that confirmed that Tababela was not a good site to build that airport. That airport has been a shame for the canadian Government because corrupt canadians broke the law in Ecuador and lied to the american investment companies in several ways.International entities rule normally in favor of airport fees as public not private. ICAO(international civil aviation administration orgaization) regulations apply here because these corrupt canadian companies are building an international airport. Furthermore, BOT(build operate and transfer) contracts, specify that the canadians are supposed to build that airport with their funds , at their own risk.When they admit that they are using airport fees from one ecuadorian airport to build the other they are admiting that they are breaking the law, and it is enough proof for the american financists that their Project Finance Model will fail. Canadians may mean angels and bells to you but they are a corrupt government who are experts in arms deals, have a horrible nature contamination record in the mining business. So you know, I am an american citizen, no I am not a leftist. Get your facts straight, will you?. Next time you visit Ecuador, look me up and do not ride the coattails of Stockwell Day, a man who is part of the Sting.Fernando Lopez (see you in Ecuador) bring your eyes open

 

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