Thursday, October 27, 2016

Diana Furchtgott-Roth – Trump Economic Adviser or Complete Hack?

Brad DeLong informs us that Diana Furchtgott-Roth has a blog:
"How national pollsters are helping Hillary Clinton." IIRC, back when Glenn Hubbard hired Diana Furchgott-Roth for the CEA, I asked, "Why is Glenn hiring that wingnut?" Various people assured to me that she was not a wingnut. Yes she is. This is highly, highly unprofessional. Any time your list of those putting their thumbs on the Democratic side of the scale includes Fox News and theWall Street Journal, you have lost any standing to appear in polite society
I’ll leave this issue of whether the polls are rigged to others but I did address her hackery with respect toObamacare. Let’s turn to a complete contradiction of hers with respect to the labor market and the implications for monetary policy. Her August 8 post argued:
the job market is not quite as strong as it looks.
I have also argued we are not at full employment but I am not arguing for higher interest rates. Donald Trump is so she also wrote:
The unemployment rate stands at 4.9 percent, and the latest inflation data show that the Consumer Price Index rose by more than 2 percent over the past year. The Fed should not depend on employment data, which will be revised several times, to decide when to raise rates. Rates have been too low for too long, and it is time for them to rise — regardless of what the jobs report shows.
In other words, the labor market is strong so we must use monetary restraint now. OK, some people might but actually believe that but Diana Furchtgott-Roth is just echoing the inconsistency and stupidity of Donald Trump. The classic definition of a hack. Oh wait – she continues:
Current low rates are impeding economic growth, discouraging saving, and increasing inequality. An increase of 25 basis points in September will still leave the Fed in a position of very loose monetary policy. The Fed's near-zero interest rates have caused massive distortions in equity and real estate markets. Investors who would have had funds in savings accounts or Treasury bills are seeking returns in these sectors. This is a recipe for a bubble, which will cause a crisis when it pops.
Brad was right – this is wingnut insanity. Diana Furchtgott-Roth may be even worse than the three stooges – Art Laffer, Lawrence Kudlow, and Stephen Moore. And no Presidential candidate would bring any of them on as economic advisers. Oh wait!

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