Jared Pincin sent me this gem from Reuters. I don’t know the author, but it really doesn’t matter as he is probably just expressing the “conventional wisdom.”
Seeking to make good on past threats in Congress to rein in the Federal Reserve’s powers, a prominent Republican lawmaker said on Thursday he will introduce legislation to focus the U.S. central bank on a single mandate to fight inflation and protect the dollar’s value.
. . .
The Fed’s aggressive actions to fight stubbornly high unemployment rates in recent years have been seen by some as straying into fiscal policy – traditionally the responsibility of Congress – and Brady’s bill aims to clear up any confusion by stripping the Fed of its jobs mandate.
That’s right folks, fiscal stimulus creates jobs and monetary stimulus creates inflation. Milton Friedman must be rolling over in his grave. I think you’d have to go back to the price controls of the 1970s to find a time when there was such mass stupidity among the chattering class. Make no mistake about it, stupidity was the cause of the 2008-09 NGDP crash. Even if the policymakers themselves weren’t stupid, they had to contend with a zeitgeist that was totally clueless about AS/AD. Even Ben Bernanke can only do so much.