Yes, yes, yes.... But it means the big banks can borrow cheaply and make those huge profits while filling the giant holes they blew (and still have) in their balance sheets (in a mark-to-market world anyway...). And that's all that matters. And big bonuses.
Agree, large corperations are waiting for the proper incentives to increase cap-ex spending. The governments of the world have lost the authority to reel in there tax adverse strategies and capital investment plans. When large manufacturing and research centers are constructed outside of the country origin, globaliztion is in full effect. This is in away similar to state to state competition hear in the U.S. State "X" increases taxes and corperation then goes to state "Y" for a tax reduction and intial setup benifit. In todays reality large cap corperations will jump from nation to nation. The Fed is trying to control entities that can jump thier borders and evade the tax man. It is a no win situation. It is only a matter of time before Chinese manufacturing and technonlogies get transplanted to Africa for cheaper labor and tax savings. I have alrready heard reports of Indian companies setting up tea farms on the African continent. Akuma
So the Fed should then either seek absolute price-level stability even at 20% unemployment, or 100% employment with 100% inflation? No kidding it's the two goals are at odds - if it weren't, you wouldn't need a freaking 'dual mandate' - only one would do. Look - There are PLENTY of legitimate criticism of Fed policy - but you guys are just throwing up fallacious arguments that betray your lack of understanding of basic economics.
We already have high double digits unemployment (factoring in long term unemployed or those who have fallen off the registers). Aside from that point, you've just talked yourself into a corner. It's impossible to fulfill this dual mandate and instead we get the worst of both outcomes. Record unemployment coupled with inflation, as others have alluded to. And this is the paramount and central criticism of the Fed, regardless of your bootlicking, bullshit reverence for the institution.
It's called getting into the middle ground... trying to find the right trade off between inflation and employment level... hence,'dual' mandate. Let me put it this way: in your mind, what is the right mandate for the Fed?
Bernanke wants us to believe and accept that the primary reason for our unemployment is that "there is not enough cheap money in the system/world". Total CROCK, of course.
It's all a gigantic set-up, a con of epic proportions. The dual-mandate allows a ridiculous amount of discretion and leeway in simply flooding liquidity into the system while also avoiding the repurcussions of such monetary folly. He's clearly fooled alot of people on this forum with this massive con. While the currency nosedives into oblivion and the cost of living escalates, we still have defenders around here who see it as necessary to try and "stimulate the economy". Sorry, but record unemployment with a lowered standard of living will not solve any problems. This economy will continue to cannabalize itself. The more we strangle it with these inflationary policies, the more we will kill off all discretionary spending and precepitate another wave of defaults and bankruptcies. We cannot print our way out of this.
It has been tried HUNDREDS of times throughout history... AND HAS NEVER WORKED! So... we're to accept that it will "this time" just because BS Bernanke is a scholar of the Great Depression? HOGWASH!!
I am with sjfan here. As much as the dual mandate of unemployment and inflation, they are already kinda morph into the same thing. The way we calculate inflation is hugely weighted by components tied to wage growth. Well, guess what, wage growth is directly inverse proportional with unemployment. Can't have wage growth unless we have low unemployment. If Fed didn't print, unemployment will be even higher. It is just a policy of spreading the pain. We all are paying for the financial crisis. The question is whether thru inflation or high unemployment.