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John Taylor's Rebuttal Of Yellen: "There Is Little Evidence Monetary Policy Has Helped Economic Or Job Growth"
While Janet Yellen's testimony will be uneventful, with her toeing the party line, and the fluff Q&A largely priced in - although everyone is eagerly looking forward to the Maxine Waters grilling - far more interesting in today's Monetary Policy and State of the Economy hearing, will be the Part 2, where various experts (full list here), mostly hawks as it would appear, will provide their rebuttals to Yellen's views. None of them is more anticipated than John Taylor - the Stanford economist whose "rule" the Fed uses, even though Taylor himself has largely disavowed the implications of the Taylor rule under current "extraordinary" conditions and has become one of the most vocal opponents of the Fed's unconventional policy. The punchline from his prepared remarks: "there is little evidence that the policy has helped economic growth or job growth. Growth has been less with the unconventional policies than the Fed originally forecast." Or precisely what we have been saying for about 5 years.
Here are the rest of the key speech excerpts:.
While the unemployment rate has declined recently, much of the decline is due to an unusually large number of people dropping out of the labor force because of the weak recovery. It is good news that the inflation rate has averaged very close to the Fed’s 2 percent goal during the past decade, but by any measure the performance of the real economy has deteriorated compared to the previous two decades.
I have argued that the main cause of the poor performance is a significant shift in economic policy away from what worked reasonably well in the decades before. Broadly speaking, monetary policy, regulatory policy, and fiscal policy each became more discretionary, more interventionist, and less predictable starting in the years leading up to the financial crisis and have largely remained in that mode.
....
Many researchers have shown that the federal funds rate was unusually low during this 2003-2005 period compared with the Taylor rule (1993), which described monetary policy in the previous two decades, and that this deviation exacerbated the housing boom or encouraged risk taking, and eventually led to the housing bust and defaults, leaving risky assets on the balance sheets of many financial institutions. The financial crisis followed.
....
Though the intention of the majority of those at the Fed in favor of the policies was to stimulate the economy, there is little evidence that the policy has helped economic growth or job growth. Growth has been less with the unconventional policies than the Fed originally forecast. In the year since QE3 gained full steam at the end of 2012, interest rates on long-term Treasuries and mortgage backed securities have risen rather than fallen as was the intent of the policy.
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These changes, anticipated changes, and time inconsistency of policy add to uncertainty. With the large magnitudes of the securities purchases, frequent changes in the policy, and little consensus on the impacts, there is no way that such a policy could be characterized as predictable or rules-based. For these reasons a number of policymakers inside the Fed have publically disagreed with the policies.
....
[T]he debate now appears to be not over whether such a rules-based policy should be adopted, but rather over when it should be adopted. The key question is whether or not we have returned to normal times, and if not, when we will return. In either case it would appear to be time to prepare.
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The full remarks are below (link) and we certainlly anticipate this particular Q&A to be far more exciting than the 10 words per minute that will be the norm of all Yellen testimonies for the next several years.
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But it has channeled trillions to the banksters and the 0.1%. Mission accomplished. Maybe it will trickle down you if you wish really, really hard and click those ruby slippers.
Taylor: How do you respond to this Mr. Yellen?
Mr. Yellen: Come here you I just want to pinch those cheeks!
Fonz,
As long as there is no math in the debate.
http://gpncenter.com/communications/No%20Math.mp4
Shutup and eat your meat. How can you have any pudding if you don't eat your meat?
QE was never about jobs or economic growth. QE is about transfering toxic assets off the balance sheet of Fed's owners. The Federal Reserve is of the banks, for the banks and by the banks - and in the darkness bind them
You're a hundred percent correct. The QE keeps the markets from tanking. It's welfare for the wealthy. Rich dirty bastards.
Great vid, funny Grande.
This stuff is funny to read.
"She means it: 6.5% don’t mean a thing. Because, in Yellen’s words, “The recovery in the labor market is far from complete.” Although 3.2 million jobs have been added since the Fed started its QE3 program of bond-buying, the labor market is still broken."
But but but
"The Fed will continue to taper its bond-buying program; the economy is not THAT weak. But the first rate hike will come only once the Fed figures the economy is making significant progress in reducing the slack in the labor market"
so when can grandma yellen's canasta playing buddies finally get out of the QQQ's and go back to their CD's?
"When will we know the time has come? Probably when the army of unemployed is reduced so much that employers will be forced to pay higher wages to attract the workers they need. That’s when the Fed will need to start worrying about its other responsibility: Keeping inflation under control."
this stuff is just tremendous. You just have to stand in awe.
how can you not respect yellen. she's saving the taxpayers a small fortune on her hair cuts...
I have been reduced to sitting in awe.
I am reduced to saying 'Awe shit...'(sic)
Clearly there is only one thing left to do: the bailed out GM should offer a working passage to China for their US employees so they may work side by side with native slave labor in their factories there.
That should improve the unemployment or underemployment numbers immediately. Forward progress!
There is a tremendous amount of evidence that the Fed caused the whole financial meltdown and fucked it up even more trying to fix it.
Gross
QE and Obamacare helps job growth by taking one full time job with benefits and creating two part time jobs with workers dependent on the Government for healthcare. The .01% make trillions with global warming, student loans, QE and Obamacare. But who cares!!!
Fixed THAT motherfucking statement.
Yeah but the Fed saved the economy from a deflationary death spiral! /sarc
Save? No. But it did postpone the inevitable. I don't believe they are done postponing the inevitable, either. A few headfakes along the way so that those in the know can trade on it, but QE infinity until the masses walk into the arms of what comes next.
I'm pretty convinced we're in the process of transition (collapse, if you prefer), and that it will take many generations, and longer than the lifespan of anyone alive today, to complete. I think that is the real plan.
that would be pretty boring. can we fit a world altering global war in there?
Likely - if one is drawn to symmetry and one sees the apex of the parabola at around 1990 or so, it might be soon.
An argument between John Taylor and Janet Yellin is like an argument between Leon Trotsky and Vladimir Lenin. It's time to turn the page....
Or between Hayek and von Mises for that matter...
They are all charlatans of one stripe or another...
BLASPHEMER!
So long as eCONomics and monetary policy remain complete disconnected from reality, you are corrct, and the laws of Nature and physics really don't give a shit either way.
hedge accordingly.
But wait! We have our first female head of the Fed, isn't that good enough to make her nomination a success?
She's about as female as a nut sack.
"The key question is whether or not we have returned to normal times"
What is normal anymore? There has been no normal for decades.
Job creation was not their goal. Banker Bonuses was their aim, which they achieved. GS bonsues have been the highest in history the last six years I've read.
John Taylor's Rebuttal Of Yellen: "There Is Little Evidence Monetary Policy Has Helped Economic Or Job Growth"
Despite the marketing pitch I think it's safe to say that those weren't actually the goals.
How about these fuckers just put it into plain words for once. "Look bitch/guy/tranny/ladyboy whatever the fuck you are, this shit is getting tedious. It's time to focus on the economy and not the putridly fake stock markets. Which aren't markets. No one believes the economy is anything but a train wreck. Let the fucking banks go broke and let's see what's on the other side."
Refreshing perspective!
Ain't gonna happen...this side of a major reset.
DaddyO
That would be congress' job
Throw the bums out
All of them
They really must think they are gods to think their policies can change the world....creating jobs is not a financial policy decision....there are many more things at work...thousands of moving parts....and someone who is determined to take them all on is the key....and not many people want to do that now..to many moving parts....
To much insanity, and too few keys.
If a good chunk of the economy is devoted to mindless unsustainable consumption fueled by cheap oil, what makes you think that those jobs catering to that consumpiton are coming back??
Get rid of the bottom 80% of the world's population and problem(s) solved.
Rome wasn't built in a day.
And there are no shortage of people here who know exactly who should go....
The fact that the bottom 80% don't really consume much is neither here nor there...
----
Hitting the Hedge at dawn seems to be your MO...
Yes, and yes.
Ain't that the truth. Half the population of California, could vanish and I wouldn't miss any of them.
Yellen and the rest of the Fed members aren't finished yet. There is still wealth to steal.
But has it bailed out bankers and made them rich beyond their wildest dreams?? Asking the wrong questions JT.
"Those jobs aren't coming back."
-- Steve Jobs
Thanks captain obvious.
The goal all along was to increase central bankster and bankster wealth. Mission accomplished.
"there is little evidence that the policy has helped economic growth or job growth."
That wasn't its purpose in the first place, as Taylor should well know. The FED's constituents are bankers, not corporations and workers.
I should have taped this hearing. I could have edited out everything but Yellen's voice. Would do wonders for my insomnia.