Stephanie Flanders is pretty excited by the decision by the US ‘Fed’ decided to pump $600 bn intothe US economy.Whilst the rest of the media reported that just about everyindustrial country in the world was outraged by the US move ‘Stephanomics’ wasas usual behind the curve :
” This week’s statement by the Federal Reserve hasachieved all that Ben Bernanke might have hoped it would achieve; stocks areup, the dollar is down, and so are US bond yields. We can’t say for sure thatit will “work”, but all of these developments ought to be netpositive for the US economy….the US sees competitive depreciation as awin-win for them. If other countries, with flexible countries, don’t respondwith QE2 of their own, then their currencies will strengthen, and demand for USgoods in those economi! es will (theoretically) go up. If they do respond, withmore easing to counteract the rise in the currency, then global demand goes up,and the US is once again better off. Put that way, it sounds like a no-brainer’
What is missing is the BBC’s usual kneejerk jump to get a comment from JosephStiglitz, Nobel prize winning economist….and supporter of Labour’s and theBBC’s positon that ‘stimulus’ works, tax cuts don’t. This time Stiglitz wasopposed to the Fed’s printing money….saying Fed policies will not reduce longterm interest rates and produce loans for SME’s and are creating chaos inemerging markets…the money is going to emerging markets which don’t want themoney…because India and China are doing fine, but the influx of short termmoney creates a bubble and increases exchange rates, destabilising theireconomy…The US policy is having an adverse effect around the world.
So no gig for Stiglitz! If you run against their meme, you’re history
Flanders is consistent in her economics opinions, at least. Printing money is always the answer.
DP- Will the Tea Party let them get away with this? It is madness
Nobody can do anything about Bernanke at the moment. The only thing people can do is keep hassling their reps in Congress and remind them that their ass is on the line if they don’t shut the barn door now that all the cash has left. Preventing the lame-duck Dem Congress from ramming through anything insane is the current order of business.
Hi David
Actually Stephanie “Floundering” Flanders is inconsistent on quite a few topics. If we go back to her update after the Fed made it move last week we got.
“After all, the US is supposedly engaged in competitive devaluation. At the very least, it is pursuing a policy of “active dollar neglect”
Whereas today we get.
“Bizarrely, now it’s the US that is on the defensive for manipulating its currency”
Yes you get it is now bizarre to think what she herself claimed only a week ago…..
I got the impression that she thought the Chinese were the ones who should be on the defensive instead, as part of the reason for the currency devaluation is to mess with China becaue of the debt and what they’ve been doing with the yuan.
Either way, she always loves the Keynesian option.
She doesnt like discussing inflation much. The Quarterly inflation report form the bank of england didnt get much of a look -in on her update that was supposed to be about it.
But hey I guess her pension is index-linked and also she keeps getting reminded of her previous posts on the subject when she does. An inconveient truth perhaps.
Danny Blanchflower is another “go to” economist for the BBC… he can always be relied on to spread doom and gloom due to “coalition cuts” and instead advocate borrowing and spending.
And for keen observers of BBC Scotland bias, I note the return of the Fraser of Allander Institute’s gloomy prognostications:
http://www.bbc.co.uk/news/uk-scotland-11727214
This shroud-waving organisation used to be a weekly favourite of the Beeb back in the 90s (until about, erm, 1997) then disappeared off the radar… but it’s back with a bang.
Of course it’s not noted in the report above that its policy director and frequent telly talking head Brian Ashcroft is married to Labour MSP Wendy Alexander, who is Douglas Alexander MP’s sister – Doug is currently Shadow Secretary of State for International Development at Westminster.
Stephanie had changed her tune somewhat for the Today prog this morning. But she was then flatly contradicted on her approach by a senior banker who slapped around her views – and Justin Webb!
But no Stiglitz.
JA
Jim O’Neill of Goldman Sachs made the point that it’s no good looking at just one month’s figures in respect of the US-China exchange rate: he said that the 10-month trend was rather more informative. But, of course, the BBC’s “analysts” always highlight the short-term view which – surprise, surprise – feeds into panic-inducing “news” items all over the BBC and – as a satisfying by-product – lets Obama off another hook.
A rare long-term view used by BBC “journalists” – also to induce panic BTW – is that of the CAGW propaganda department which relays without challenge the results spouted by dodgy computer models (and their even dodgier academic minders) which apparently are capable of predicting the temperature in Hull on 25 September 2085 to the nearest tenth of a degree (but not tomorrow’s weather in Sheffield with comparable exactness).
Unbelievable bias. It’s all very well having a punt on received wisdom but they’re pumping £60 billion into fake cash for the next 10 months. Fortunately, not being a Yank I can be quite philosophical about it (smack bang in the middle of the mid-terms – don’t you worry your pretty little heads about it voters) but it’s perhaps the biggest gamble in the world ever! And Frau Flanders has just swallowed it hook, line & sinker. Outrageous.
Off Topic – I think something went wrong this morning as IDS was given a relatively easy time of it although I suspect the interview was curtailed – someone should be sacked!!
Did anyone catch Barry Obamas nutty economic outpourings on PM yesterday ? It seems the Germans have this crazy idea that they should produce things then sell them to other countries and use the money to pay off their debts or in case of a rainy day. Barry believes this is bad , very bad and amazingly was proposing capping German exports. This went un-noticed by the PM reporterette who instead did a report on just why the Germans behave in this weird way. She told us this was all part of a German national enjoyment of being a miser. She either never said or just plain doesn’t realise that the Germans have a prior experience with inflation.
and the Goldman Sachs investment chief this morning pointed out that German factories are working overtime to produce cars for the Chinese market.
Obama just bleats about the Yuan exchange rate, Germany aims to sell into the burgeoning Chinese economy. And overpaid BBC journalists can’t see which policy works best.
Ah, don’t get me started! Yet another diplomacy fail from our first Post-American President. Can’t say we didn’t all see this coming, sadly.
The BBC knows cock all about economics – and that is being highly generous
We should all think of ways to save our national cash and erase the deficit. Apart from dumping al-beeb, we should examine the state church, the monarchy, and the unelected lords! How many millions there? Getting rid of the lot would be a major exercise in courage.
You’d think the lefties at the state broadcaster would go for it!
BTW — logging in to this more and more ineffective and questionable site is quite a challenge. Two or three time-consuming attempts is my average. Just who else finds the procedure a needless obstacle?
Anyway, what exactly has this site achieved? The nemisis is still there spewing out its virtriolic bias.
Ironically, BBC’s cousin, Channel Four, hit the nail on the preverbial public sector debt with this documentary available to watch online at Four on Demand for the next month.
I never thought I would see such a programme in the UK but here you go…now if only it could start a revolution in UK people’s idea about the role of the state here:-
http://www.channel4.com/programmes/britains-trillion-pound-horror-story