The president of the Minneapolis Fed, one Narayana Kocherlakota, decided to devote the entire 2012 Annual Report to not one but two interviews with . . . . . . . . himself. The interviews are a celebration of economic stupidity. A few excerpts:
“Quantitative easing has the impact of pushing down on longer-tern interest rates. And that should be directly stimulative to the economy because by pushing down on market interest rates, people are led to think, ‘Hmm, maybe I shouldn’t be buying those assets that are paying such a low yield. I should spend money instead.’” No need to save, invest, or work and produce; just spend, spend, spend, like a nation of spoiled rich kids.
“We’d like to push it [interest rates] down further and can’t. That should be a signal to the fiscal authority to be more interventionist in the economy” with a “future consumption tax” to “encourage current spending.”