Surprisingly(?) even Obama suffers from “inflationphobia”

This is a small part of the Obama NYT interview:

NYT: A couple of slightly different topics. On the economy, the Fed is obviously an important player. You’ve got a big decision ahead of yourself in terms of the chairman. What are you looking for in a chairman? And there were reports yesterday that you are very close to naming Larry Summers as the new Fed chairman. True?

MR. OBAMA: I have not made a final decision. I’ve narrowed it down to some extraordinarily qualified candidates.

NYT: Do you want to say who?

MR. OBAMA: No. (Laughter.)

NYT: I tried.

MR. OBAMA: And what I’m looking for is somebody who understands the Fed has a dual mandate, that that’s not just lip service; that it is very important to keep inflation in check, to keep our dollar sound, and to ensure stability in the markets. But the idea is not just to promote those things in the abstract. The idea is to promote those things in service of the lives of ordinary Americans getting better.

And when unemployment is still too high, and long-term unemployment is still too high, and there’s still weak demand in a lot of industries, I want a Fed chairman that can step back and look at that objectively and say, let’s make sure that we’re growing the economy, but let’s also keep an eye on inflation, and if it starts heating up, if the markets start frothing up, let’s make sure that we’re not creating new bubbles.

That sounds much more like Summer than Yellen! What you gather from the interview is that the inflation mandate trumps the employment mandate at least 3-1!

4 thoughts on “Surprisingly(?) even Obama suffers from “inflationphobia”

  1. Are you sure that this isn’t just the Obama brand of bull? I don’t like him and would rather have someone else as POTUS, but even his bull sounds a little better on this stuff than people from my former tribe. The concern I have is that he’ll nominate Summers not because he’s qualified, but because he’s a loyal party man – and the next thing we know the only QE going on is to finance government projects. I don’t believe that either man cares at all about bubbles, inflation, or stable markets as long as they get what they want politically.

    • Just to add to the above: I suspect that the economic “hostage-taking” is going on on both sides of the aisle – and average Americans are going to be screwed for at least a decade or at least until someone stands up to be the adult in the room. Bernanke and crew made one heck of a mess -as it’s said, the road to hell is paved with good intentions.

  2. I like the fact that at least Obama mentions the central bank has obligations to economic growth.

    Volcker just penned a piece for the latest issue on the the New York Review of Books, in which he suggested the single mandate—price stability—was preferable!

    Of course, all of this is miles away from what I really want, and that is NGDP targeting….

  3. Pingback: Obama the Inflationist « J.uris D.ebtor

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