Former Fed member and National Economic Council director Larry Lindsey unleashed a barrage of uncomfortable truthiness on no lessor Fed apologist than Steve Liesman this morning. In the brief span of 4 minutes, Lindsey demolished Fed policy, "The idea of letting an asset bubble run is literally one of the most foolish things a central bank can do... they always end badly;" crushed the status quo, "Everyone loves the upside but the clean-up is tough... everyone loves a party... but they always end badly with a hangover... at 4am no one thinks the party is going to end but eventually they will have to drive home," and removed hope, "The Fed is out of ammunition after using too much for too long."
Ex-Director of Lindsey explains... (apologies for clip quality)...
Isn't it ironic how former economic policymakers begin to see reason once they leave the inner circle?
"The Fed needs a long-term focus...ignoring asset inflation leads to problems. And of course the third bubble, we deliberately tried to create asset inflation."
"Asset bubbles should not be a substitute for long-term policy."
"I dont think running a bubble-based monetary policy is appropriate."
