Friday, September 30, 2011

The Fed Is Political

. Friday, September 30, 2011

John Thacker, via TC:

Here’s a Hill poll on inflation, and here’s a Gallup poll, and here’s a Rasmussmen poll
While all differ on the exact numbers, they agree in broad strokes. The median voter is highly worried about inflation. Democrats are worried less about inflation, but still quite a lot. Indpendents are virtually indistinguishable from Republicans in worrying a lot about inflation. 
That means that the inflation/hard money bit from the GOP is not an appeal to the base. It’s actually a reach to the center
Worrying about inflation may be wrong– and I think it is wrong, according to the data– but it’s an attempt to go after the median voter, not play to the base.
We should remember most people are still employed, so inflation erodes the value of their wealth. Perhaps it would benefit the unemployed by stimulating AD, but that's still a minority of the population. The median voter* wants strong RGDP growth, not just NGDP growth.

*Yes, I know that's a simplification. I think it's fine for these purposes.

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The Fed Is Political
 
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