Lot of I Told You Sos

A lot of other people know the economics better than I do. But my God there were a lot of folks earlier this year arguing, very convincingly, that the move away from stimulus to inflation-worry and retrenchment was little short of insane given the mammoth economic crisis the country was weathering. It had all the hallmarks, though on a much speeded-up basis, of the move to slash spending in 1937, which had terrible consequences for the US economy. The Fed itself isn’t that high on the blame list on this, at least in relative terms. A lot of others were much more in the camp of getting all revved up about the dangers of inflation and debt when in fact we seemed to be just hovering off the edge of a tip back into a deflationary tumble. But it really is one of those ‘what were they thinking’ moments. And the Feds move today just sort of confirms it.