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Sunday, August 13, 2006

Fed to Try New Tactic: Clarity

http://news.yahoo.com/s/ap/20060813/ap_on_bi_ge/demystifying_the_fed

WASHINGTON - Former Federal Reserve Chairman Alan Greenspan left the door slightly ajar. His successor, Ben Bernanke, wants to open it a bit more. If investors, businesses and consumers have a better grasp of what the Fed is thinking about interest rates and the economy, they may be inclined to respond the way the central bank wants them to. And that can help the Fed do its job_ keeping the economy and inflation on an even keel.


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The Fed wants to be more open in communicating with millions of Americans. Millions who can't even explain why stocks and bonds usually go in opposite directions, much less the more subtle theories of the impact of monetary policy on economic expansion or the pros and cons of deficit spending on the fiscal side. Millions who cannot recognize the disconnect between the unprecedented economic stimuli that have been applied to this economy (record low interest rates AND record government deficit spending) and the anemic growth in jobs and GDP.

The Fed can't succeed in stabilizing economic performance through information because the structure of our entire economy has been altered by corporate and government policies gambling on the ignorance of the masses about the long term consequences of deficit spending by governments and concentration of economic power under fewer and larger corporations. In short, their policies have been driven by the assumption that central bankers and large corporations know better than the rest of us. NOW they want to open our eyes to the financial precipice to which they have led us?

Yea, THIS will end well...