Enlisting Sarah Palin
by digby
The bankers have obviously decided they need to enlist the gullible teabaggers with know-nothing gibberish for their latest gambit:
Now that the midterm elections are history, Sarah Palin is setting her sights and rhetorical skills on the Federal Reserve and its easy money policy.
On Twitter, the former Alaska governor and possible 2012 presidential contender said she would begin a round of discussions at school events to teach children about quantitative easing to prepare them PALIN-RALLY/for the results of the Fed’s plan to boost the sluggish U.S. economy.
“Today:trade speech;tmrw school event 2 start discussing QuantitativeEasing w kids around US so they prepare 4 Feds experiment w their future,” Palin tweeted.
More than a few kids may be baffled by quantitative easing.
In an effort to boost lackluster growth the Fed has been injecting cash into the economy by buying up government securities in what it calls quantitative easing. It announced a fresh round of $600 billion in purchases last week and the action was welcomed by the stock market which moved higher on the news.
But critics, such as Palin and conservative Republican Ron Paul who is likely to head a House monetary policy subcommittee when the new Congress is seated in January, say the Fed’s move will do little to encourage economic growth and will ignite inflation.
Palin's "economic analysis" was challenged by a WSJ report and she responded like this:
Mr. Reddy takes aim at this. He writes: “Grocery prices haven’t risen all that significantly, in fact.” Really? That’s odd, because just last Thursday, November 4, I read an article in Mr. Reddy’s own Wall Street Journal titled “Food Sellers Grit Teeth, Raise Prices: Packagers and Supermarkets Pressured to Pass Along Rising Costs, Even as Consumers Pinch Pennies.”
The article noted that “an inflationary tide is beginning to ripple through America’s supermarkets and restaurants…Prices of staples including milk, beef, coffee, cocoa and sugar have risen sharply in recent months.”
As Columbia Journalism review reports, however, she's just completely wrong:
What that WSJ article said—which you can in fact discern even from her selective quoting—is that food prices may be beginning to rise. And when I say selective quoting, I mean selective quoting. Note where the ellipsis in her WSJ quote there. That’s from the lede of the story, which says, in full:
An inflationary tide is beginning to ripple through America’s supermarkets and restaurants,threatening to end the tamest year of food pricing in nearly two decades.
So, Palin is hammering the Journal and Reddy for pointing out that she’s flat wrong about grocery prices going up significantly in the past year. What does she do? She quotes a separate Journal story that confirms what Reddy is saying—and cuts out that part with three dots. Nice!
What's the point of this? Well, it's to get it out in the teabag ether. And it's working. I just caught a short segment of Ali Veldshi on CNN telling us all that prices of "commodities" are skyrocketing. Except of course, they aren't. Here's Krugman:
Wow — so the official right-wing line seems to be that all the talk about falling inflation is a leftist plot — that real people know that prices of real things like groceries are soaring. I should have guessed that from the ravings of our resident troll (singular — internal evidence suggests that there is only one).
Anyway, I thought it would interesting to see how much the price of groceries has diverged from other measures of inflation, in particular the core inflation whose logic, no matter how often explained, never seems to get across.
So, the following figure shows inflation measured at different time horizons. It asks, what is the average inflation rate over the past 10 years, the past 9 years, etc., if you look at core prices versus looking at food consumed at home, aka groceries.
What we see is that grocery prices have tended to rise faster than inflation as measured by the core CPI, but not by all that much: over the past 10 years the grocery inflation rate has been about half a point faster than the core inflation rate. If you look at more recent data, what you see is that grocery prices have bounced around; if you’re asking about the one-year inflation rate, grocery prices have risen somewhat faster than the core rate, but over the past two years grocery prices are actually down.
Does this look to you like a situation in which real people experience soaring inflation, never mind what the pointy-headed types say? Not to me. But then, my head is especially pointy.
Krugman, of course, knows that reality doesn't matter in these debates. If enough gasbags sound the alarm about grocery prices, people will begin to believe they are paying more for groceries (just as enough caterwauling about taxes going up makes peopple feel like their own have been hiked even when they haven't.)
The Big Money Boyz are enlisting the Teabag freakshow on this for a reason. It's not just the inflation boogeyman either. They clearly want to stop any kind of economic recovery program other than tax cuts, which they know will not work. (They've been tried several times by both Bush and Obama since 2008.)So what's the real point of this?
The political strategy has long been clear --- keep the economy distressed in order to unseat Obama. The ideological purpose is clear too -- discredit Keynesianism once and for all so that democratic government will no longer have any role to play in economic crises. But obviously, this is about more than politics or ideology. Krugman thinks it's a mindless herd of political and financial elites running over a cliff. Others think it's traders being traders, making money where ever they see the opportunity. My personal opinion is that this is disaster capitalism at work. Somebody always makes a lot of money when the world goes mad, and there's nothing like confusion and anxiety to coerce people into acting against their own interests. If they can use ignorant and delusional "validators" like Palin and Beck, the job becomes much easier.
I'm not sure about that, though. Watching these Masters of the Universe and the Banksters over the past few years, you just can't imagine that they are competent enough to put this together. The traders are just trying to get as many hookers and as much coke as they possibly can before passing out and the John Galt wannabes have shown themselves to be perfectly willing to shoot the golden goose in the face out of sheer avarice. So is it just happening because it's happening? Or is there a method to the madness?
Maybe the truth is much simpler than any of that --- these people have backed themselves into a political and ideological corner and nobody knows how to get out of it, so they're actually following the teabag ethos rather than leading it. Which brings us back to the mindless herd going over the cliff ...
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