"What We Should Be Debating"
People’s takes on whether or not reconfirming Ben Bernanke would be a good idea turn out to have a lot to do with their judgments about politics—what would happen next in the Senate—and don’t reveal that much about their views on economic policy. Scott Sumner has better questions:
We should be debating:
1. Whether to cut the fed funds target from 0.25% to 0%
2. Whether to put an interest penalty on excess reserves
3. Whether to do additional QE
4. Whether to set an inflation or NGDP target
5. Whether to target growth rates or levels
6. And of course the key overarching question: Would the economy benefit from an increase in AD, or nominal spending?
Right. We the public actually know—by design—surprisingly little about the views of the people on the Fed’s Open Market Committee. Brad DeLong seems to think that Bernanke secretly holds better views than his expressed ones and that the real problem is the other members of the FOMC. That sounds wrong to me, but there’s no way to know for sure. Easier to stick the questions of what it is the Fed should be doing, namely worrying more about unemployment and the risks of a “double dip” and less about hypothetical future inflation.