Sunday, November 14, 2010
Well if you're going to put it That way...
(in case the video isn't loading, you can find it here)
The Lovely and Gracious listened in when I heard this and asked when I am going to apply to work for "the Goldman Sachs. I mean, everyone else gets a piece..." For myself, I couldn't stop laughing.
Update: As I hoped, Sumner responded.
A couple easy corrections below the fold:
#1 - QE1 went straight back into the Fed as the banks liked risk free interest-on-reserves. So it never got out into the rest of the economy but stabilized the banks. If you think that helped some people by avoiding FDR-era bank holidays, it worked.
#2 - "The New York Fed will buy the bonds electronically on the open market. In doing so, it will compete with other investors. During the recession, when the Fed cut its key interest rate to a record low near zero, the New York Fed bought short-term Treasurys. When the Fed wants to tighten credit, the New York Fed sells securities. The process is called "open market operations."" So, no, it's not all G.S.
Other corrections, like there are plenty of economists (here are three) who think this is a step in the right direction but there are ways the Fed could do it better, could be made, but the video is entertaining and informative even if it argues against my priors. Hat tip: Mises Institute.