No sooner than the January jobs report was released than the Wall Street Journal posted a succinct headline: ‘Hiring, Wages Pick Up as Job Market Nears Full Health’.
Whether the job market is actually as red hot as the BLS’ headline numbers is a debatable topic, but it is absolutely clear that the ‘emergency’ the Fed cited 73 months ago when its pegged the money market rate a zero has long since vanished. Indeed, by the standards of all prior history, ZIRP was a death bed remedy. Prior to December 2008, the Fed had never, ever pegged the funds rate at zero – not even during the Great Depression.
So if the US economy did generate new jobs at the 4 million annual rate implicit in the November-January average, how is it that not only is the money market still pinned to the zero bound, but that the Fed continues to energetically waffle over how many more months it will remain there? Don’t these people know what the words ‘emergency’ and ‘extraordinary measures’ mean in plain English?
Not that it really matters. The truth is, the stubborn and unaccountable continuance of a crisis era monetary policy in the face of a purportedly booming labor market reflects something altogether different than economic common sense. Namely, it is the product of a pernicious partnership of convenience between the Keynesian money printers who dominate the Fed and the gamblers who inhabit the Wall Street casino. Together they virtually smoother any recognition that the current juxtaposition is just plain nuts.
As it happened, not more than 60 minutes after the WSJ headline appeared the usual suspects were at work explaining a condition that seemed anomalous even to the cheerleaders on CNBC.
First, the Fed’s PR man at the WSJ posted a ‘Hilsenramp’, reminding the gamblers that the ‘whopping increases in payroll employment in recent months’ don’t necessarily mean that the party will end any time soon. You need to understand the code words, he explained:
This post was published at David Stockmans Contra Corner by David Stockman ‘ February 6, 2015.
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