This is getting way too stupid. The Keynesian Chorus has launched a full blast trilling campaign, emitting a shrill cackle of warnings against a Fed rate hike. Yes, 80 months of pumping free money into the canyons of Wall Street is not enough.
Why?
Well, this is hard to type with a straight face, but according to the cackling gaggle of Keynesian Chicken Littles, the Fed has already tightened too much!
Paul Kasriel, the former chief economist at Northern Trust who now writes ‘The Econtrarian’ blog, argues that ‘in recent months Fed monetary policy has become downright restrictive.’
Would that Kasriel could be dismissed as merely a Wall Street shill, but its seems that he’s taking his cues directly from John Maynard Keynes’ very vicar on earth. That would be Larry Summers, who yesterday blogged an identical bit of tommyrot:
I believe the case against a rate increase has become somewhat more compelling even than it looked two weeks ago….. First, markets have already done the work of tightening. The U. S. stock market is worth $700 billion less than it was 2 weeks ago and credit spreads have widened noticeably. Financial conditions as measured by Goldman Sachs or the Chicago Fed index have tightened in the last 2 weeks by the impact equivalent of more than a 25 BP tightening. So even if resisting inflation required a 25 BP tightening as of two weeks ago, this is no longer the case.
This post was published at David Stockmans Contra Corner on September 9, 2015.
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