Paul Krugman as usual has some interesting things to say today. This time he asks why Ben Bernanke, head of the US Federal Reserve, doesn't do what Ben Bernanke, economist, recommended for Japan in 2000.
At the time, Bernanke advocated : "purchases of long-term government debt (to push interest rates, and hence private borrowing costs, down); an announcement that short-term interest rates would stay near zero for an extended period, to further reduce long-term rates; an announcement that the bank was seeking moderate inflation, “setting a target in the 3-4% range for inflation, to be maintained for a number of years,” which would encourage borrowing and discourage people from hoarding cash; and “an attempt to achieve substantial depreciation of the yen,” that is, to reduce the yen’s value in terms of other currencies."
Sounds complicated, doesn't it? But that's part of the problem with economics: it sometimes seems above the ken of ordinary mortals. Yet economic policy and strong economic goals--like full employment--are what we need. It's going to be up to the NDP in Canada to push for them since for sure the Harper Conservatives won't come through with them.
When the tears are dried, it has to be back to work for the Dippers and their supporters. The country needs and wants strong opposition, a fact which should not be forgotten in sadness surrounding the near-Greek tragedy of Jack Layton's death.