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San Fran Fed Asks If "People Understand Monetary Policy"; Finds Those With "No High School Diploma" Don't

Tyler Durden's picture


For their sake, we hope at least the answer from the Fed is "yes." Yet it is quite ironic that the subtext of this paper is that Monetary Policy can actually fail, when, get this, people don't grasp all the nuances of monetary policy. In other words, it is not the Fed's fault when it fails - it is the people's fault: "we fi?nd evidence that the relationship between unemployment and interest rates is not properly understood by households in the lowest income quartile, and by those with no high school diploma." Cue Kartik Athreya to explain to us all why only Ph.D.s understand the complexities of monetary policy when it works, and why it is those without a highscool diploma that are at fault, when it doesn't.

The Abstract:

Do People Understand Monetary Policy?


By Carlos Carvalho and Fernanda Nechio


We combine questions from the Michigan Survey about the future path of prices, interest rates, and unemployment to investigate whether U.S. households are aware of the so-called Taylor (1993) rule. For comparison, we perform the same analysis using questions from the Survey of Professional Forecasters. Our fi?ndings support the view that some households form their expectations about the future path of interest rates, inflation, and unemployment in a way that is consistent with Taylor-type rules. The extent to which this happens, however, does not appear to be uniform across income and education levels. In particular, we fi?nd evidence that the relationship between unemployment and interest rates is not properly understood by households in the lowest income quartile, and by those with no high school diploma. We also fi?nd evidence that the perceived effect of unemployment on interest rates is asymmetric, being relevant only for interest-rate decreases. Finally, we argue that the relationships we uncover can be given a causal interpretation.




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Fri, 02/17/2012 - 13:22 | 2170186 LawsofPhysics
LawsofPhysics's picture

More tax dollars "hard" at work.  End the fucking Fed.


Yes, apparently the central bankers are just mis-understood.  So are the laws of physics and thermodynamics, now you tell me which "laws" are more subject to change for that lower 45%?  Speechless indeed.

Fri, 02/17/2012 - 13:27 | 2170221 flacon
flacon's picture

The only people who understand money are those who earn it through PRODUCTIVE private sector jobs. PhD professors are mostly in the unproductive public sector along with those who receive food stamps to keep them alive. 



Fri, 02/17/2012 - 13:31 | 2170242 LawsofPhysics
LawsofPhysics's picture

slaves and slave masters, some things never change.

Fri, 02/17/2012 - 13:37 | 2170285 Manthong
Manthong's picture

All they have to know is that "policy" in the context of the Fed is a cover word for repression.

Fri, 02/17/2012 - 13:53 | 2170390 francis_sawyer
francis_sawyer's picture

So does this mean that if I have a diploma from the "School of Hard Knocks" (ostensibly ~ an degree course that nary an elite has)... & if I commit a crime like snatching someone's purse or pickpocketing them... I'm EXEMPT from prosecution?

Fri, 02/17/2012 - 15:14 | 2170585 TheSilverJournal
TheSilverJournal's picture

The central planners of our money don't even understand the relationship between unemployment and interest rates. In reality, the Fed’s dual mandate is nonsense. Dialing inflation up or down doesn’t necessarily bring about more or less employment. In the long run, the central planning of money can only bring lower employment as resources are being misdirected into unproductive areas.  High inflation combined with high unemployment is the norm during a currency crisis.

Fri, 02/17/2012 - 16:35 | 2171197 economics1996
economics1996's picture

The Phillips Curve is complete bullshit.  The only reason unemployment declines when there is inflation is that labor becomes cheaper when there is inflation.

If we did not have price floors there would be no fucking unemployment problem.

These fucking monetarist/Keynesian clueless fucks need to get a real job.  Fucking clueless dumb ass idiots.


And any additional employment due to the lowering of realm wage rates is dependent on many other economic conditions, and is by no means a given.



Fri, 02/17/2012 - 17:11 | 2171370 TheSilverJournal
TheSilverJournal's picture

Sure, inflation makes min. wage laws less relevant. More importantly, though, the lowering of interest rates creates a false prosperity today at the expense of future prosperity by encouraging spending now of money that would have otherwise been saved and used as investments in capital to create goods in the future.

All you have to do is look at Zimbabwe to know the Phillips curve is BS.

Fri, 02/17/2012 - 14:50 | 2170721 nostromo17
nostromo17's picture

doesn't follow whatsoever - try again

Fri, 02/17/2012 - 14:49 | 2170712 nostromo17
nostromo17's picture

your acceptance/apathy is what keeps things from changing.

Fri, 02/17/2012 - 15:16 | 2170860 LawsofPhysics
LawsofPhysics's picture

And what do you know about my actions or that of my employees?  What's that? you don't know anything about what we are doing? perhaps you should STFU.

Fri, 02/17/2012 - 17:08 | 2171346 GenX Investor
GenX Investor's picture

News Flash:  Correlation = Causality...  Well done boys, excellent thesis!  What else did you come up with???

Fri, 02/17/2012 - 14:48 | 2170707 nostromo17
nostromo17's picture

Except people with food stamps could be productive if they had a job and professor are ultra non-productive having a job.

Your lack of compassion illustrates your lack of depth of understanding and your comfort being someone who assumes they have a productive job

so they don't have to give a shit.

Fri, 02/17/2012 - 15:23 | 2170891 LawsofPhysics
LawsofPhysics's picture

Rule # 1-Nature makes no promises regarding anyone's survival idiot.  I don't know what graduate school you are currently enrolled in, but I suggest you get back to work.  I, and my company, are very charitable in our giving each year.  I am in the business of feeding people asshole, hard work, always has been.  what you, like so many of the youth today fail to realize is that there is a difference between receiving a degree and earning a degree or a position in the productive workforce for that matter.

Moreover, many of you food stamp recipients have made numerous concious decisions to have a lot of children, you don't have to be "educated" to understand that having more children when you can not feed yourself is fucking stupid, now you want someone to "save" you and your children - see rule #1.

Fri, 02/17/2012 - 13:29 | 2170227 Comay Mierda
Comay Mierda's picture

even 2nd graders can understand that more money printed = less valuable currency. all these idiot phd's that are so busy with this mental masturbation of creating "scholarly reports" on interest rates/unemployment/targeting gdp fail to understand this and actually believe in the bullshit government data. who are the idiots here fed fuckers?

Fri, 02/17/2012 - 13:50 | 2170364 killallthefiat
killallthefiat's picture

I agree.  My second grader totally understands the function of the gov't/fed.  They print money and it gets worth less and less.  I even printed out some dollars on the laserjet and had 100 copies come out. (B&W and overly large, of course.)  She asked why we could not do this in the correct size and color.  Out of the mouths of babes...

Fri, 02/17/2012 - 14:21 | 2170579 Non Passaran
Fri, 02/17/2012 - 13:39 | 2170255 Azannoth
Azannoth's picture

The best empirical proof that people don't understand monetary policy is that we didn't have a Revolution yet

"It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning." - Henry Ford

Fri, 02/17/2012 - 14:10 | 2170493 xela2200
xela2200's picture

I pledge Allegiance to the flag of the United States of America and ...

Wait wait


Got it. Sorry, the mind control programing kicked in for a sec.

Fri, 02/17/2012 - 14:45 | 2170686 nostromo17
nostromo17's picture

You got that right.

Fri, 02/17/2012 - 13:36 | 2170280 V in PA
V in PA's picture

Improving the public’s understanding of the central bank’s policy strategy reduces economic and financial uncertainty


In other words... The sheep need to be brainwashed a little more, and then the FED policy will work.

Since the less educated are part of the financial equation, wouldn't including their ignorance into the model make for a better model?

Fri, 02/17/2012 - 13:44 | 2170305 Azannoth
Azannoth's picture

The Church has been doing exactly this (quite successfully at that) for the past 2000 years, I guess the bankers are a little envious of that because after all they too are doing God's work

Fri, 02/17/2012 - 13:51 | 2170379 fonestar
fonestar's picture

I would like to form a think tank composed of GED recipients and high school drop outs to find out if Federal Reserve board members understand monetary policy.

Fri, 02/17/2012 - 14:25 | 2170602 johnQpublic
johnQpublic's picture

i thought the first rule of fight club is that we dont talk about fight club


Fri, 02/17/2012 - 14:39 | 2170652 Clayton Bigsby
Clayton Bigsby's picture

Was thinking exactly that - are my tax dollars really supporting this?

Fri, 02/17/2012 - 14:52 | 2170732 Island_Dweller
Island_Dweller's picture

First bloggers and now those with only a high school edumacation.......

Anyone else remember this one?:

Bottom line: We're not smart enough to play a role in the economy.

Sat, 02/18/2012 - 11:56 | 2172829 Eireann go Brach
Eireann go Brach's picture

Once I seen who wrote this??... 2 fucking Mexicans??. Go back to the fields and count the berries you picked!

Fri, 02/17/2012 - 13:21 | 2170187 JPM Hater001
JPM Hater001's picture

I have been asked not to comment on this...

Fri, 02/17/2012 - 13:22 | 2170196 DaveyJones
DaveyJones's picture

if people INSIDE the Fed don't understand monetary policy, why should people OUTSIDE?

Fri, 02/17/2012 - 13:52 | 2170357 dwdollar
dwdollar's picture

Let's boil this down.

The FED (which has unlimited funds) funds studies which suggest only an elite minority understand monetary policy therefore "proving" the necessity of said FED to be controlled by said elite minority for the "betterment" of all.


Fri, 02/17/2012 - 17:18 | 2171394 Theosebes Goodfellow
Theosebes Goodfellow's picture

Wait! Wait! Wait! I wanna' play too, DWDollar! Let's see, boiling..., boiling...

#1: real asset-based currency = good.

#2: debt-based currency = bad.

#3: Borrowing currency = bad.

#4: Lending currency = good, but get real asset collateral.

#5: Printing debt-based currency = bad.

#6: Manipulating interest rates of over-printed debt-based currency = bad.

But of course, I, as a guy who simply got a GED, can't possibly understand monetary policy....

/sarc off


Fri, 02/17/2012 - 13:23 | 2170197 GeneMarchbanks
GeneMarchbanks's picture


I'm not. Basically we're now at the point where 'it's not us, it's you!' is being deployed because the clusterfuck is beyond saving.

Money is a minds construct. It could essentially be anything or nothing. FIAT seems absurd without faith doesn't it?

Fri, 02/17/2012 - 13:23 | 2170201 Confused
Confused's picture

100% correct. Its obvious in everything "they" do. Surprising? Not in the least. But it is fucking annoying.

Fri, 02/17/2012 - 13:23 | 2170203 LawsofPhysics
LawsofPhysics's picture

"FIAT seems absurd without faith doesn't it?"


Fri, 02/17/2012 - 14:42 | 2170670 nostromo17
nostromo17's picture

or delusions without faith?

Fri, 02/17/2012 - 15:25 | 2170895 LawsofPhysics
LawsofPhysics's picture

pick up a history book and tell us all how that turns out, over and over. No delusions here.

Fri, 02/17/2012 - 14:03 | 2170436 DaveyJones
DaveyJones's picture

post of the week award

Fri, 02/17/2012 - 13:22 | 2170198 dexter_morgan
dexter_morgan's picture

What a waste of time, money, energy.

Fri, 02/17/2012 - 13:39 | 2170292 V in PA
V in PA's picture

Mission Accomplished!

Fri, 02/17/2012 - 13:56 | 2170398 francis_sawyer
francis_sawyer's picture

If they have that much time on their hands, I wish they'd just go back to surfing for midget tranny porn on the web...

Fri, 02/17/2012 - 13:24 | 2170202 dwdollar
dwdollar's picture

I don't understand the relationship between unicorns and pixie dust. Does that make me a fool also?

Fri, 02/17/2012 - 13:25 | 2170208 VelvetHog
VelvetHog's picture

What was the question again?

Fri, 02/17/2012 - 13:26 | 2170216 dwdollar
dwdollar's picture

This reminds me of a professor laughing at a student who asks a valid question which the professor can't answer.

Fri, 02/17/2012 - 13:56 | 2170239 pods
pods's picture

I asked one of those talking about p-orbitals. An electron can be here or here, but not in between.

So I asked if it can be here or there but not in between, how does it get from here or there?


"Can't ask that question."


Fri, 02/17/2012 - 14:41 | 2170657 nostromo17
nostromo17's picture

Not funny.

Fri, 02/17/2012 - 16:23 | 2171165 Willzyx
Willzyx's picture

Thats quantum mechanics for you.  It doesn't produce definative black and white answers, but but accurate and replicatable probability distributions.  Even the greatest minds in quantum mechanics don't fully understand it and can't answer seamingly simple questions like yours.  Einstein sat on the sidelines of the quantum revolution.  It's theories played no role in his later works.

Fri, 02/17/2012 - 14:43 | 2170673 nostromo17
nostromo17's picture

Its far worse.

Fri, 02/17/2012 - 13:26 | 2170218 Coffin Dodger
Coffin Dodger's picture


Fri, 02/17/2012 - 14:51 | 2170727 nostromo17
nostromo17's picture

destructive useless cunts

Fri, 02/17/2012 - 13:27 | 2170220 AccreditedEYE
AccreditedEYE's picture

Disgusting....and will probably be used as more ammo in the war for Central Planning.

Fri, 02/17/2012 - 13:55 | 2170397 Dr.Vannostrand
Dr.Vannostrand's picture


Dusty Bottoms: Time for plan B. Plan A was to break into El Guapo's fortress.
Carmen: And that you have done, now what?
Dusty Bottoms: Well we really dont have a plan B. We didn't expect for the first plan to work. Sometimes you can overplan these things.
Fri, 02/17/2012 - 13:28 | 2170222 Vince Clortho
Vince Clortho's picture

If the people of the U.S. understood how this Central Bank Pyramid Monetary System actually works, there would be a revolution.

Fri, 02/17/2012 - 13:27 | 2170223 one man wolf pack
one man wolf pack's picture

The current monetary policy was created in secret and they have tried to keep as many people as they can from understanding how it works.

Shit,  90 percent of the people I talk to don't even know that the Federal Reserve is a privately owned bank.  More than Half of them think the dollar is still back by gold in Fort Knox.


Does anyone really think that more than 30 -40 percent of the people could even understand monetary policy if they tried.


Fri, 02/17/2012 - 14:01 | 2170422 francis_sawyer
francis_sawyer's picture

Modern Day concept of "money" comes from watching rap videos...

If you stuff it in girls g-strings, they shake their ass for you (so it must be worth something)...

Fri, 02/17/2012 - 15:11 | 2170836 nostromo17
nostromo17's picture

How is it possible for anyone to understand something that inherently makes no sense?

Fri, 02/17/2012 - 13:28 | 2170226 RSloane
RSloane's picture

The web page has been removed. Anyone else getting this message when clicking on the link?

Tyler! What did you do!?!

Fri, 02/17/2012 - 13:28 | 2170229 pods
pods's picture

Maybe we should write a paper dealing with how many FED bankers understand exponents?


Fri, 02/17/2012 - 15:45 | 2170975 DaveyJones
DaveyJones's picture

Now Pods you know they're all fans of the Montreal ball players

Fri, 02/17/2012 - 13:29 | 2170232 navy62802
navy62802's picture

They just needed confirmation that Americans are sufficiently mind-fucked.

Fri, 02/17/2012 - 13:29 | 2170235 VulpisVulpis
VulpisVulpis's picture

...because it's infallible....right? and since ceteris paribus exists in the real world....right? because perfect information exists...and all economic participants are rational actors -- because reality fits the models, and economics is "science"

come hither, stupid people, lay down on this Procrustean will only sting a little

Fri, 02/17/2012 - 13:30 | 2170241 machineh
machineh's picture

So high unemployment lowers interest rates? 

COOL! Let's lay off the entire Federal Reserve staff, and then refi our mortgages.

Guerrilla econ, bitchez -- you don't need no PhD to make money off PhDs! ;-)

Fri, 02/17/2012 - 13:32 | 2170248 Shizzmoney
Shizzmoney's picture

Dude, there are economists who don't fucking understand monetary policy.

It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.
Henry Ford


Fri, 02/17/2012 - 14:36 | 2170634 Reese Bobby
Reese Bobby's picture

My ass hurts.

Shannen Doherty

Fri, 02/17/2012 - 13:33 | 2170251 tony bonn
tony bonn's picture

i now have a leading candidate for today's golden fucktard award - someone at the san francisco fed.....but the day has not yet ended....they could be outdone by someone - maybe a certain president maybe a certain msnbc anchorwhore

Fri, 02/17/2012 - 13:33 | 2170252 ABG LINE
ABG LINE's picture

But we understand now FULLY thanks to ZEROHEDGE.

Fri, 02/17/2012 - 13:36 | 2170267 Mercury
Mercury's picture

And yet...your best chances for upward, income quartile mobility are to understand that Fed policies aren't working...and what that means for long-term inflation.

Fri, 02/17/2012 - 13:37 | 2170284 taniquetil
taniquetil's picture

The Fed is acting like it's the retarded kid in your 8th grade class that gets picked on all the time.


"I'm right about everything. People just don't understand us."

Fri, 02/17/2012 - 13:37 | 2170287 the 300000000th...
the 300000000th percent's picture

Some PHD's don't understand Economics example, doochbag Krugman

Fri, 02/17/2012 - 13:38 | 2170290 PaperBear
PaperBear's picture

Way to go, blame the poor and the thick for the failure of all these PhD economists.

Fri, 02/17/2012 - 13:49 | 2170358 junkyardjack
junkyardjack's picture

Blame the poor for everything. Who cares about them, they're poor

Fri, 02/17/2012 - 13:39 | 2170294 bbq on whitehou...
bbq on whitehouse lawn's picture

The less "schooling" you have the less effective propaganda is, the more "schooling" you have the more effecitve propaganda is.

Thats why there is a push for official schooling.


Fri, 02/17/2012 - 13:43 | 2170316 InconvenientCou...
InconvenientCounterParty's picture

GOP anti-union dogma full stop.

The human mind is fairly homogenous and easily imprinted regardless of education level.

Fri, 02/17/2012 - 13:40 | 2170297 InconvenientCou...
InconvenientCounterParty's picture

news flash:

people in the lower quartile of educational exposure are the most biased towards action.

and the kicker...

people in the upper quartile believe an expanded control framework and prison capacity is the most market efficient way to manage this risk.

Fri, 02/17/2012 - 13:41 | 2170306 dcb
dcb's picture

if you read the introduction they say economic theories work because people believe in them.

Fri, 02/17/2012 - 15:36 | 2170937 the 300000000th...
the 300000000th percent's picture

 "it works if people believe in them" so its like religion

Fri, 02/17/2012 - 13:42 | 2170309 q99x2
q99x2's picture

Law 1: Protests against the FED shall be made illegal. 

Fri, 02/17/2012 - 13:43 | 2170313 i love cholas
i love cholas's picture

Anything past a B.A. is just a ploy to avoid joining the work force. PhD is not needed to understand complexity of pushing print on the xerox.

Fri, 02/17/2012 - 14:02 | 2170432 pods
pods's picture

No shit.  There is only 1 SOP needed at the FED.

Load paper drawer.

Hit print.

Repeat as necessary.  

(bold means business baby)

Fri, 02/17/2012 - 13:46 | 2170333 JR
JR's picture

The lie is it’s a legitimate system, that it was created to be beneficial to American citizens and their economy. That’s not true.

It’s a private banking cartel, for Heaven’s sake, created and operated by men to enrich their own wealth and power.

It is not a government monetary system responsible to the citizens; it is an excuse put over on a controlled Congress that provided the banking cartel with quasi legitimacy.

If you understand the following paragraph, says G. Edward Griffin, then you understand the Federal Reserve System:


The entire function of the machine [the cogs, mirrors, and pulleys that make the banking cartel’s magical mechanism work] is to convert debt into money.  It’s just that simple.  First, the Fed takes all the government bonds which the public does not buy and writes a check to Congress in exchange for them.  (It acquires other debt obligations as well, but government bonds comprise most of its inventory.)  There is no money to back up this check.  These fiat dollars are created on the spot for that purpose.  By calling those bonds “reserves,” the Fed then uses them as the base for creating 9 additional dollars for every dollar created for the bonds themselves.  The money created for the bonds is spent by the government, whereas the money created on top of those bonds is the source of all the bank loans made to the nation’s business and individuals.  The result of this process is the same as creating money on a printing press, but the illusion is based on an accounting trick rather than a printing trick.  The bottom line is the Congress and the banking cartel have entered into a partnership in which the cartel has the privilege of collecting interest on money which it creates out of nothing, a perpetual override on every American dollar that exists in the world.  Congress, on the other hand, has access to unlimited funding without having to tell the voters their taxes are being raised through the process of inflation.”

As Earl Jensen of Eagle Lake, Minnesota, asked in a letter to the editor: “How long would it take you to own and control nearly everything if you had sole right to create a nation’s currency as interest-bearing debt owed to you?  Not long. And that is the position banks hold in the United States of America today…Bankers are the shadow government making the important decisions.”

Fri, 02/17/2012 - 13:48 | 2170349 apberusdisvet
apberusdisvet's picture

Those of us above a certain age can clearly point to the period when a great shift occured in the quality of public education.  It was the early 70s when the unions took over and the Cloward-Piven Strategy was established by neo-Marxists.  Hign school civics and constitutional history classes were eliminated and "indoctrination" was substituted for education.

No wonder the majority of those attending public schools post 1980 are economically, financially and political illiterate and have been so thoroughly brainwashed that they are clueless about the implications of the incremental abrogation of the Bill of Rights and the Rule of Law.


Fri, 02/17/2012 - 13:48 | 2170353 digalert
digalert's picture

aware of the so-called Taylor (1993) rule?


Right away you know this is bogus...there are no 'rules'

Fri, 02/17/2012 - 13:50 | 2170366 CutterJeff
CutterJeff's picture

Taylor rule says for every point of inflation above target, the base intrest rate should be more than 1%, say around 1.5%.

ShadowStats is showing around 6% inflation based on 1990 methods, and around 11% on the 1980 methods

So... let's see... 11% , take away the 2% target is 9%.

9% times 1.5 for the Taylor rule is 13.5%

As I'm understanding Monetary policy, the Fed should be setting the rate at about 13.5%, maybe discount a little to stimulate and call it 12%.


(innocent voice) I wonder what that would do to the government debt numbers? (/innocent)

Fri, 02/17/2012 - 14:11 | 2170498 LawsofPhysics
LawsofPhysics's picture

Yep. The minimum cost for creating capital so that you (hopefully) don't mis-allocate it.  "Rules" and "Laws" are only treated as such when the consequences for their violation does not change.  Who has gone to jail again?

Wait a minute, I just got a call on the red phone, sorry, I was simply supposed to call you a "terrorist".

Fri, 02/17/2012 - 13:51 | 2170367 Apocalicious
Apocalicious's picture

The second derivative joke of this farce is that the relationship between interest rates and unemployement ISN'T PURELY CAUSAL IN EITHER DIRECTIONAL. There are underlying factors that drive the public sector allocation of capital, interest rates being one but certainly not the only, which can lead to changes in unemployment. The ivory tower Ivy league eggheads have fooled themselves into believing in their own wizadry. You can't target unemployment, fools. Pay no attention to the central planner behind the curtain. Hubris...


Further, related to zero bound effect, I wonder if HIGHER RATES at this level may actually stimulate more allocation of capital by removing the incentive to arb the short end and forcing banks to discern amongst credits. You know, actual underwriting instead of model monkeys. Because operation twist is just pushing on a rope.


End the Fed.

Fri, 02/17/2012 - 13:57 | 2170405 LawsofPhysics
LawsofPhysics's picture

" I wonder if HIGHER RATES at this level may actually stimulate more allocation of capital by removing the incentive to arb the short end and forcing banks to discern amongst credits. You know, actual underwriting instead of model monkeys."

Good question, better ask yourself if the energy is actually available to support the creation of real value in the current eCONomic model and monetary system.  The answer is pretty clearly "no".  Bring those fusion reactors on line, fucking NOW!

Fri, 02/17/2012 - 15:07 | 2170816 nostromo17
nostromo17's picture

allowing rates to go higher might re-align the relationship between rates and risk...which would be a good thing possibly vs. no relationship of use at the moment.

Fri, 02/17/2012 - 14:11 | 2170393 nostromo17
nostromo17's picture

EXILE THe Economist LIARS, Ban the Pseudo Science called Economics, Destroy the FED

Since the Fed monetary policy doesn't work it poses in its failure the question of whether the Fed has any clue as to monetary policy or underlying scientific basis for policy; and whether monetary policy has any meaning whatsoever, is theoretically possible, can be based on dubious unsupported projections about the future and can have any validity when policy has no actual theoretical grounding to support it.

It would appear that people "without diplomas" might be the only ones WHO DO understand monetary policy as the complete and utter non-scientific BS it is. They not subject to higher education so they are not indoctrinated and blinded to the truth, (and don't feel falsely they are part of a ruling class) which is that the FED is a propaganda tool of the so called ruling class and a means to steal from the people AND ECONOMICS IS NOT SCIENCE AT ALL ITS A LOAD OF PROPAGANDist CRAP, PSEUDO-SCIENCE and should be outlawed along with the FED.

-speechless as well.




Fri, 02/17/2012 - 14:41 | 2170667 JR
JR's picture

Absolutely. This Fed survey is meant to identify people who don’t approve of what it does as "ignorant." It’s a cover up using the Taylor rule as smoke and mirrors to mask the lies coming from the central bank and BLS. The proof is in the economic pudding. Common sense based on economic reality is the proof that Americans' standard of living cannot survive Bernanke's central planning. 

When the Fed artificially manufactures low interest rates and lies about the inflation rate, no amount of economic education would be enough to determine the relationship between interest rates and unemployment, except that it represents trillions for the bankers and bondage for the people.

But the one thing the ignorant such as myself do know is that the artificially driving down of interest rates to “free up credit” not only does not work, per the late economist Henry Hazlitt, but it has the OPPOSITE effect of that intended – unemployment. Massive unemployment means there’s no recovery.

To decrease unemployment during the Great Depression, Keynesians recommended two main remedies :

One is deficit spending. Official figures cited by Hazlitt show that: “The central and decisive fact is that heavy deficits were accompanied by mass unemployment…”

Two is artificially low interest rates. Says Hazlitt: “The other main Keynesian remedy for unemployment is low interest rates…artificially produced by printing more money, i.e. by deliberate inflation… The question immediately before us is: Did low interest rates prevent mass unemployment?” The answer is No.

Hazlitt’s official statistics show that:  In sum, over this period of a dozen years  low interest rates did NOT eliminate unemployment. On the contrary, unemployment actually INCREASED as interest rates went down.

Survey, indeed!

Fri, 02/17/2012 - 14:03 | 2170435 nostromo17
nostromo17's picture



I VOTE IDIOTS pathetic stupid idiots

who wasted a very expensive education

to burden us with their idiotic claim

they can exercise Policy.

Economic Policy at best intrudes more chaos into economic systems.

Fri, 02/17/2012 - 14:32 | 2170627 Reese Bobby
Reese Bobby's picture

What kind of question is that?  You can be both.

Fri, 02/17/2012 - 14:36 | 2170635 nostromo17
nostromo17's picture

Valid point. I was I suppose pointing at their intentionality. --if they are idiots they may not intend to be lying.

Fri, 02/17/2012 - 14:10 | 2170473 nostromo17
nostromo17's picture

This means WAR

...throw out the fucktard morons who call themselves economists

and are just stooge tools for the other crooks and morons

the Congress, The So called Ruling class (the money'd class)

and let the actual economy work on its own without tampering

so it crumbles to begin anew after the fucktards screwed it up already.

Fri, 02/17/2012 - 14:17 | 2170557 Dermasolarapate...
Dermasolarapaterraphatrima's picture

BS. I asked several lawyers and doctors about simple things like money supply, inflation. etc and they were so far off.

Worse then that they were so misinformed from watching MSM and listening to the Ministry of Truth.


Thank goodness for ZH, Dr Housing Bubble and The Daily Reckoning and many other top sites for FACTS not VooDoo.


Fri, 02/17/2012 - 15:01 | 2170780 JR
JR's picture

Hey, maybe Maxine Waters or some other bright bulb in Congress will explain it to us. Since Bernanke has a hard time answering Ron Paul's questions without assistance and can't identify financial bubbles or recessions, he's probably not much of a source, although he does carry the "tools."

Fri, 02/17/2012 - 14:25 | 2170593 Nobody For President
Nobody For President's picture

Do Federal Reserve employees who write dumb fuck papers like this understand Federal Reserve policies? Or taxpayers?

(Don't you just hate rhetorical questions?)

Fri, 02/17/2012 - 14:27 | 2170600 ThisIsBob
ThisIsBob's picture

Looks to me like they have a solid six figures invested in that strudy.

Hope it has trickled down somewhat.



Fri, 02/17/2012 - 14:28 | 2170605 giovanni_f
giovanni_f's picture

Do People Understand Monetary Policy and Porn consumption patterns at the FED during financial crises? By Carlos Carvalho and Fernanda Nechio and Dr. Ron Jeremy.

Reminds me the good old times in the good old east: Familiarize yourself with the concepts of scientific Marxism and Leninism, acquire its slang, learn how it is applied by the party - otherwise shut up. Leave it to the experts to scientifically advance society.

@Carlos, Fernanda: Instead of whining, how about doing something against the ignorance of the masses: As a nice tax payer financed project, how about adopting the Mao Bible for a  "Quotations from the Bernank"?

Fri, 02/17/2012 - 14:39 | 2170655 nostromo17
nostromo17's picture

You believe in experts? Not sure which side this comment falls on? Sounds therefore like a politically correct adult that never answers or poses a question in a manner that can reveal a direct answer...losers side.

Fri, 02/17/2012 - 14:27 | 2170610 Minoan
Minoan's picture

I scored 94367.

Ze price stabeeleetee...

Fri, 02/17/2012 - 15:46 | 2170611 kill switch
kill switch's picture

Pure definition of misplaced arrogance..then they fuck it up with inept dial twisting..ZIRP thanks for the heads up..Carlos

Fri, 02/17/2012 - 14:29 | 2170619 Reese Bobby
Reese Bobby's picture

Unintentional humor is the best kind.

Fri, 02/17/2012 - 14:37 | 2170637 Miles Kendig
Miles Kendig's picture

Those fuckin' fucked up fruit loop fuckin' fucks at the fucking Fed know fuckloads less about fucking real world economics than those fucked up fuckin marshmallow head bankers do.

DAMN!  Fucking chart porn fuckin addicts to my fucking left at that fucking fed and midget tranny porn fruit loop fuckers on my fucking right at the SEC and I'm fucking stuck in the fucking "reasonable middle" with fucking all of them

- Love Rahm

Fri, 02/17/2012 - 14:37 | 2170639 daxtonbrown
daxtonbrown's picture

Only stupid people believe you have to save and produce and pay your bills. Smart people believe paper pushers ARE the economy.

Fri, 02/17/2012 - 14:47 | 2170695 geekgrrl
geekgrrl's picture

You really have to hand it to these self-important arrogant shits. There are very few academic disciplines that have been so thoroughly and consistently wrong as economics, and with that kind of track record they should have been run out of town on a rail a long time ago.

Imagine if your cellphone never worked as promised. Or the dams didn't work as advertised. Or planes routinely and regularly fell out of the sky. Very few people know the details of how these devices and technologies actually work, but it's still obvious that they do work, by and large, as advertised. 

Contrast this with the results of a hundred years of Fed actions: we're on the verge of a catastrophic collapse in faith in the system because no matter how much the money masters insult the general public, the bottom line is that more and more people see that Fed policies don't work, and in fact are actually oriented around benefiting the already wealthy. The problem isn't what the people know or don't know, the problem is that their models are wrong. A classical error of mistaking the map for the territory, one they're too arrogant to see. Actually, I take that back. It's more like they are trying to force the territory to fit the map. A Procrustean bed, as VulpisVulpis said. Remind me again what the gods' solution is for hubris?

Fri, 02/17/2012 - 14:54 | 2170744 JR
JR's picture

Bravo! geekgrrl.

Fri, 02/17/2012 - 15:03 | 2170793 nostromo17
nostromo17's picture

Economics is really not an academic discipline nor should it pretend to be. It should be "The hope to study economics in a scientific manner someday if it turns out to be possible." - courses. Economics is longest surviving positivist pseudo science along with psychology....



Fri, 02/17/2012 - 15:07 | 2170813 Diamond Jim
Diamond Jim's picture

heck, you can ask many of those with a recent HS diploma what 2+2 equals and get the wrong answer....oops, sorry, they get half credit if they answer "5", as they were close. Don't want to crush any self-esteem. 

These Fed governors are from the same place as the 9th district wacko Court, home of one princess "Stretch" Pelosi,  and a place where taxpayers pay for sex change operations...give me a break.

Most Americans do not understand economics. Even those that do (Uncle Bernie, Prez Owe and other Keynsians and Marxists) screw things up, witness our latest economic fiasco and semi-depression. If anyone is to blame it is these clowns in charge..........

Fri, 02/17/2012 - 15:17 | 2170861 Yen Cross
Yen Cross's picture

Doesn't the S.F Fed have something better to do? Like painting rainbows on $100 bills.

Sat, 02/18/2012 - 01:31 | 2172391 geekgrrl
geekgrrl's picture

No. The Fed boys are too busy fucking over the rest of the world. Gay folks have nothing to do with it, but thanks for making your prejudice explicit.

Fri, 02/17/2012 - 15:17 | 2170863 Downtoolong
Downtoolong's picture

Let me  guess, these are the same professional experts in finance and economics who want to blame the entire mortgage and housing crisis on Joe Sixpack for not recognizing the possible horrific ramifications to our entire economy of refinancing his double wide with a teaser-rate six-month adjustable mortgage at 110% of its market value.

Fri, 02/17/2012 - 15:20 | 2170875 Bansters-in-my-...
Bansters-in-my- feces's picture

Fuck You FedHead.

People without a high school diploma have NOT been brainwashed by the system, TO HAVE BEEN "TAUGHT HOW TO UNDERSTAND" the system.

Uneducated people are not stupid,they know when they are being "robbed and terrorized" by the system they are said not to understand.

Just most don't understand the ALL politicians work for the same boss.

Not a whole lot to understand.

Whoever prints the bucks rules.....

Sounds fair eh...?

Fri, 02/17/2012 - 15:35 | 2170923 Jena
Jena's picture

I would imagine that an average high school dropout who got their G.E.D. has a better understanding of the state of the economy than the Fed economists who are manipulating data so that they can continue printing paper and telling us that debt doesn't matter, there is no inflation and the U.S. bond sales are going just fine, when in reality we're selling them mostly to ourselves because few others are willing to take the bait.  Anyone who has to fill their gas tank and buy groceries, things the average Federal Reserve economist or Nobel Prize winner has no experience doing because they have layers of 'people' to do that sort of thing for them.

Here's a quiz maybe THEY ought to take: 

How thick is your bubble, measuring the class-based cultural gap in America.  My guess is that the average Fed economist would not do so well.

Fri, 02/17/2012 - 15:50 | 2170990 magnumpk
magnumpk's picture

I can't get the words "Arrogant Pricks" out of my mind

Fri, 02/17/2012 - 17:56 | 2171547 grid-b-gone
grid-b-gone's picture

The less educated completely understand what the Fed is doing and are employing simple street smarts to counteract Fed moves. They are used to dodging the credentialed.

When they buy food, someone from the grocery store does not sneek into their house and pull the plug on the refrigerator to stimulate more food spending.

When they buy a car, the dealer does not shave rubber off the tires, file down brake lines, or mix water in with the oil in expectation of a repeat sale sooner.

The Fed and Treasury may be the only entities that can purposely cheapen their product so as to dilute its utility for the user, and still demand customer loyalty.   

Reverse the process. Give lower-educated people 0% loans instead of banks and just watch the economy and money velocity perk up. 

Sat, 02/18/2012 - 05:27 | 2172559 Stockmonger
Stockmonger's picture

It's amazing that people with no high school diploma are more aware that interest rates and unemployment are only loosely correlated than supposedly educated people!

Sat, 02/18/2012 - 11:07 | 2172777 blindman
blindman's picture

the relationship is ...the lower and longer the interest rate
is kept low the greater credit expansion and price inflation
of all financialized artifacts and services. in time, as the
paradigm propagates through a region greater "growth", transmission
of the system is required to sustain the temporal credit
payments, debts due. this has a direct impact on employment as,
we have seen, local labor at living wages becomes impossible.
so there is the correct relationship. low interest rates over
time lead to unemployment in time. ( under the current structure
of fiat money ) it is asymmetric, sure.
it is also systemic "legal" stealing plain and simple which is why
the "leaders", hired frontman for the elite criminals, the media-
same bunch, will stand on their heads for years to avoid looking
at it. it is too lucrative for the insiders to ever challenge,
until it isn't, at which point everyone is shocked and dismayed
and becomes a zombie. off to some island where then can watch on a
flat screen t.v. the destruction from a safe distance.
some say it leads to malinvestment and moral hazard.
this is just systemic stealing, looting, pillage and fraud
ubiquitous, till no one alive knows right from wrong or
what it was that persons meant when they used the word

Sat, 02/18/2012 - 13:16 | 2172967 Uncle Remus
Uncle Remus's picture

Read my lips - Fuck. The. Fed.

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