Sunday, 6 March 2011

'Many ways of looking at the rule'

Lessons Learned from Ben Bernanke's Policy Rule Discussion at the Senate

At yesterday's hearing before the Senate Banking Committee, Fed Chairman Ben Bernanke talked about monetary policy rules in response to a series of questions by Senator Pat Toomey. First, the Chairman stated that the Taylor Rule calls for interest rates “way below zero” and that this justifies methods such as quantitative easing. This is puzzling because I have reported for months that the Taylor Rule (see 1993 paper) does not call for an interest rate below zero. Second, when Senator Toomey then asked if Taylor believed the Taylor Rule called for rates below zero, Chairman Bernanke didn’t answer directly, but instead claimed that in 1999 I preferred a different rule to the one I published in 1993; he then said that the 1999 rule gives a much different rate. Senator Toomey then pressed on and specifically said the Taylor Rule called for rates higher than we have now, at which point Chairman Bernanke changed tack and argued that there were other policy rules that call for below-zero interest rates.

John B. Taylor March 1, 2011
Full article here

Well, Mr Ben Shalom Bernanke, there are many ways of looking at your performance, but the general rule is that you don't argue with a Jewish fiancial terrorist, posing as an expert of the matter.
While the inflation floods the world, Mr Ben wants to practice some 'many' ways of looking at the rule. I.e. a hammer dropped doesn't fall, but grows in size, when you place your eyes between the drop point and the centre of the earth.