Back in the days when you had to wear a tin-foil hat, hang out with Ayn Rand, and despair at the over-regulated ways of the Hoover administration, it was considered mainstream to believe in the twin pillars of the Fed: price stability and full employment.
Now, of course, every economist looking to make his name post-Keynes has developed more and more Ptolemaic gobbeldygook that has old Occam, rolling in his grave, despairing that his razor can’t be used to kill him again. And a big part of that theory is that full employment is really secondary, after all, to inflation control.
Because if you’re on the side of capital (as all supply siders are) you don’t want your capital to bleed away into oblivion. And, ahem, the richer the capitalists, the more money there is to trickle down, if only we could quit paying those silly taxes!
Of course all of that is nonsense, and none of the economic models that these ideas are founded on hold up to the data without above-said Occam-sickening epicycles.
Eventually we are just going to have to realize that we have to pay for some things. If we don’t want full employment, then we have to have a Euro style safety net. Otherwise, America will be a sewer.
That said, I haven’t seen him in a tinfoil hat lately but I know that he hung around in [sic] Ayn Rand, and I have seen Hoover restored in him: Alan Greenspan. The pure insanity of yesterday’s rate hike has me stunned here at home in San Luis Obispo.
Of course, not doing it after he had signalled he would would have made it clear that this is no soft patch, and probably cancelled irrevocably Hoover II’s second term (oopse, I mean Bush II).