Struck by the near unanimity of the view that the Paulson blueprint is beside the point--something that Paul Krugman and the Wall Street Journal, for heaven's sake, have been able to agree on--I attempt a limited defense in this column for National Journal (the link expires in a week). The document is not a waste of time, and I do not see it as a cynical political maneuver. Most of what the Treasury proposes actually makes sense, and it would be good to see the plan acted on. The problem is that the blueprint fails to ask the most pressing and important questions. As I noted two posts ago, it is more about form than content.
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National Journal: Don't trash the Paulson blueprint
04 Apr 2008 01:48 pm
Comments (4)
Chairman Ben S. Bernanke
At the Cato Institute 25th Annual Monetary Conference, Washington, D.C.
November 14, 2007
Federal Reserve Communications
http://www.federalreserve.gov/newsevents/speech/bernanke20071114a.htm
Each of the participants in the FOMC meeting--including the Federal Reserve Board members and all the Reserve Bank presidents--will, as in the past, provide projections for the growth of real gross domestic product (GDP), the unemployment rate, and core inflation (that is, inflation excluding the prices of food and energy items). In addition, participants will now provide their projections for overall inflation. Both overall and core inflation will continue to be based on the price index for personal consumption expenditures (PCE).5
5: Participants will no longer provide projections for the growth of nominal GDP. These now seem relatively less useful to the public, given participants' projections for real GDP growth and overall inflation.
See also: "birth death" model to "estimate" job creation; BLS admits it is faulty in transition periods.
Also see; Wages adjusted for inflation.
To wit: The increase in real GDP in the fourth quarter primarily reflected positive contributions from personal consumption expenditures (PCE), exports, nonresidential structures, state and local government spending, and equipment and software that were largely offset by negative contributions from private inventory investment and residential fixed investment. Imports, which are a subtraction in the calculation of GDP, decreased.
The deceleration in real GDP growth in the fourth quarter primarily reflected a downturn in inventory investment and decelerations in exports, in federal government spending, and in PCE that were partly offset by a downturn in imports.
**
The City of New York
Monthly Report
on
Current Economic
Conditions
March 4, 2008
Highlights
http://www.nyc.gov/html/omb/pdf/ec02_08.pdf
Inflation: In January the core PCE index rose 2.5 percent y/y, well above the Fed’s
target rate of one to two percent. Inflation in the New York Area continues to trail the
nation.The January headline and core inflation rates were 3.7 and 2.1 percent.
Chairman Ben S. Bernanke
At the Cato Institute 25th Annual Monetary Conference, Washington, D.C.
November 14, 2007
Federal Reserve Communications
http://www.federalreserve.gov/newsevents/speech/bernanke20071114a.htm
Each of the participants in the FOMC meeting--including the Federal Reserve Board members and all the Reserve Bank presidents--will, as in the past, provide projections for the growth of real gross domestic product (GDP), the unemployment rate, and core inflation (that is, inflation excluding the prices of food and energy items). In addition, participants will now provide their projections for overall inflation. Both overall and core inflation will continue to be based on the price index for personal consumption expenditures (PCE).5
5: Participants will no longer provide projections for the growth of nominal GDP. These now seem relatively less useful to the public, given participants' projections for real GDP growth and overall inflation.
See also: "birth death" model to "estimate" job creation; BLS admits it is faulty in transition periods.
Also see; Wages adjusted for inflation.
To wit: The increase in real GDP in the fourth quarter primarily reflected positive contributions from personal consumption expenditures (PCE), exports, nonresidential structures, state and local government spending, and equipment and software that were largely offset by negative contributions from private inventory investment and residential fixed investment. Imports, which are a subtraction in the calculation of GDP, decreased.
The deceleration in real GDP growth in the fourth quarter primarily reflected a downturn in inventory investment and decelerations in exports, in federal government spending, and in PCE that were partly offset by a downturn in imports.
**
The City of New York
Monthly Report
on
Current Economic
Conditions
March 4, 2008
Highlights
http://www.nyc.gov/html/omb/pdf/ec02_08.pdf
Inflation: In January the core PCE index rose 2.5 percent y/y, well above the Fed’s
target rate of one to two percent. Inflation in the New York Area continues to trail the
nation.The January headline and core inflation rates were 3.7 and 2.1 percent.
Chairman Ben S. Bernanke
At the Cato Institute 25th Annual Monetary Conference, Washington, D.C.
November 14, 2007
Federal Reserve Communications
http://www.federalreserve.gov/newsevents/speech/bernanke20071114a.htm
Each of the participants in the FOMC meeting--including the Federal Reserve Board members and all the Reserve Bank presidents--will, as in the past, provide projections for the growth of real gross domestic product (GDP), the unemployment rate, and core inflation (that is, inflation excluding the prices of food and energy items). In addition, participants will now provide their projections for overall inflation. Both overall and core inflation will continue to be based on the price index for personal consumption expenditures (PCE).5
5: Participants will no longer provide projections for the growth of nominal GDP. These now seem relatively less useful to the public, given participants' projections for real GDP growth and overall inflation.
See also: "birth death" model to "estimate" job creation; BLS admits it is faulty in transition periods.
Also see; Wages adjusted for inflation.
To wit: The increase in real GDP in the fourth quarter primarily reflected positive contributions from personal consumption expenditures (PCE), exports, nonresidential structures, state and local government spending, and equipment and software that were largely offset by negative contributions from private inventory investment and residential fixed investment. Imports, which are a subtraction in the calculation of GDP, decreased.
The deceleration in real GDP growth in the fourth quarter primarily reflected a downturn in inventory investment and decelerations in exports, in federal government spending, and in PCE that were partly offset by a downturn in imports.
**
The City of New York
Monthly Report
on
Current Economic
Conditions
March 4, 2008
Highlights
http://www.nyc.gov/html/omb/pdf/ec02_08.pdf
Inflation: In January the core PCE index rose 2.5 percent y/y, well above the Fed’s
target rate of one to two percent. Inflation in the New York Area continues to trail the
nation.The January headline and core inflation rates were 3.7 and 2.1 percent.
Krugman was addressing the content. And even you suggest the content stinks. You even state that it fails to address the most important questions. How good is a plan that fails to address the most important things?
Posted by Joe Klein's conscience | April 5, 2008 3:55 PM