in a slightly extended version:
http://www.dailykos.com/storyonly/2009/10/13/792721/-Obama-has-an-unprecedented-opportunity-to-re-ma ke-the-economy

In the long run, we're all dead. John Maynard Keynes

Remarkably the Democrats seem more concerned about containing the growth of the Federal deficit than Bush ever was.

notes from no w here

And some matching stupid from Ireland from Progressive Economy:

There are two things to remember: the one and only goal of Government fiscal strategy has been to contain the deficit. They have set no targets for job creation / retention, investment, consumer spending or even a timeline on shortening and lessening the impact of the recessionary dive. The exclusive objective of fiscal policy has been to contain the deficit.

In keeping with this strategy, the Government brought in the supplementary April budget out of fear that the deficit would rise to -12.75 percent. Only weeks earlier, they had published the Addendum where they had set a 2009 deficit target of -9.5 percent (this itself was a downward revision of a target they had set, yet again, only weeks previously in the October Budget - a target of -6.5 percent).

The April budget's measures, combined with the earlier pension levy, was intended to contain the annual deficit at 10.75 percent for this year and next year - winding down to the Maastricht threshold of -3 percent by 2013.

So what is the ESRI projecting for this year and next? In 2009, they project the annual deficit to be -12.9 percent. That is considerably above the Government's target for this year. In 2010, the deficit will remain pretty much the same, -12.8 percent.

Turns out that pursuing a policy of shrinking the economy doesn't help get you out of a recession. Who knew?

Doesn't this all depend upon your definition of recession?  If the people they TRULY represent are the wealthy and they're back doing fine, aren't you (as a politician representing your constituency) doing your job?  If the schmucks out of work keep electing these people to office, aren't they getting what they deserve?  I've stopped feeling sorry for the unemployed, one of which I am not; I know, I know ... that's today.  What about tomorrow?  I hear you.  

I love the smell of roast chicken in the morning!

FT Alphaville » Blog Archive » Moving targets, QE edition

Charlie Bean, the Bank's deputy governor for monetary policy, has just made a speech called "Quantitative easing: An interim report", in which he rather moves the QE goal posts. The policy, we are now told, is not so much about getting banks to lend. It's more about pushing up asset prices to repair banks' balance sheets.

Here's the relevant bit from the speech:

Fortunately, increased bank lending is not necessary for Quantitative Easing to work. Indeed, it was precisely because the Monetary Policy Committee expected the additional monetary injection not to stimulate bank lending directly at the current juncture, that the Asset Purchase Facility's purchases were targeted at assets held primarily by the non-bank private sector.

So if the Asset Purchase Facility buys gilts from pension funds or asset managers, they will then have to look for another home for their money. As it is not very rewarding just to hold it on deposit, they are likely to look to put their money into other assets, including equities and corporate bonds. Thus not only does the price of gilts rise as a consequence of the Asset Purchase Facility's initial purchases, but also the prices of a whole spectrum of other assets.

That in turn lowers the cost of non-bank finance and encourages increased corporate issuance. Also the rise in asset prices increases wealth and improves balance sheets. In this way, Quantitative Easing helps to work around the blockage created by a banking system that is still undergoing a process of balance sheet repair.

That, of course, is rather at odds with Bean's previous work on the QE subject

So, if they did (did they?) know QE would not affect bank lending - which wasn't Rocket Science, since the great majority of people and businesses are not particularly creditworthy - they didn't see fit to share that fact with anyone else.

And now they post-rationalise QE with the explicit admission that their express purpose was, and is, to create the current bubble in financial assets.

As one of the comments put it...

The idea that wealth increases thanks to the BoE using the printing presses is Zimbabwe-crazy. The Bank is distributing wealth to the asset rich and taking wealth from the asset poor, its as if Robin Hood was reincarnated as an estate agent.

Modern conservatives engage in one of man's oldest exercises in moral philosophy: the search for a superior moral justification for selfishness.Galbraith