Problem: High Oil Prices... Solution: Print More Money!?!?!?

Using logic that can only be described as "asinine", one of the most influential economists in the country, and a member of the Federal Reserve, has just declared that the solution to dangerously high commodity prices is to flood the market with more paper currency...

"If [the rising price of oil] plays through to the broad economy in a way that portends a recession, I would take a position we would respond with more accommodation," Lockhart said at the conference.

Very interesting Mr. Lockhart.  So you believe that in a deflationary environment, the proper response is quantitative easing... and you also believe that in a inflationary environment, the proper response is, yet more, quantitative easing... certainly, no one can accuse of you overly-complex thinking.

It is good that educational institutions no longer teach such quaint ideas as the direct positive correlation between money supply and commodity prices.  Otherwise, the Federal Reserve would be leading us down the exact opposite of the correct path.  It is good...

Maybe after they are violently removed from office by the impoverished lynching mob of lower/middle class, the surviving members of the Federal Reserve could find second careers in carpentry.

Article - Is Wealth Gap Widening Under Obamananke? (yes!)

Article is sorta fluffy, but it conveniently sums up many of the arguments against the policies we are currently engaged in...

Consumer sentiment among families with income above $75,000 jumped to 88.2 in early February, the highest since under President Bush in 2007, according to the Reuters/University of Michigan's latest survey. 

But sentiment among lower-income households dropped to 67.7 from 72.1 in January, trapped in a range it's been stuck in since just after Obama's 2009 inauguration. 

The president helped widen this gap by compromising on the Bush tax cuts with the Republicans in Congress, agreeing at the end of last year to extend them on all incomes for two years, investors said. 

Meanwhile, Fed Chairman Ben Bernanke has set upon a large quantitative easing program that has boosted the stock market by increasing liquidity, but also raised the costs of basic goods that hit the poor the very hardest.

Poverty 1 - Middle Class 0

'Better late than never' - that's what I suspect the motto of mainstream media is.  Oh well.  Here's today's soundbite...

Are you better off than your parents? 

Probably not if you're in the middle class. 

Incomes for 90% of Americans have been stuck in neutral, and it's not just because of the Great Recession. Middle-class incomes have been stagnant for at least a generation, while the wealthiest tier has surged ahead at lighting speed. 

In 1988, the income of an average American taxpayer was $33,400, adjusted for inflation. Fast forward 20 years, and not much had changed: The average income was still just $33,000 in 2008, according to IRS data. 

Meanwhile, the richest 1% of Americans -- those making $380,000 or more -- have seen their incomes grow 33% over the last 20 years, leaving average Americans in the dust. Experts point to some of the usual suspects -- like technology and globalization -- to explain the widening gap between the haves and have-nots 

And public policy of the past few decades has only encouraged the trend. 

The 1980s was a period of anti-regulation, presided over by President Reagan, who loosened rules governing banks and thrifts. 

A major game changer came during the Clinton era, when barriers between commercial and investment banks, enacted during the post-Depression era, were removed. 

In 2000, President Bush also weakened the government's oversight of complex securities, allowing financial innovations to take off, creating unprecedented amounts of wealth both for the overall economy, and for those directly involved in the financial sector. 

Tax cuts enacted during the Bush administration and extended under Obama were also a major windfall for the nation's richest. 

And as then-Federal Reserve chairman Alan Greenspan brought interest rates down to new lows during the decade, the housing market experienced explosive growth. 

"We were all drinking the Kool-aid, Greenspan was tending bar, Bernanke and the academic establishment were supplying the liquor," Deutsche Bank managing director Ajay Kapur wrote in a research report in 2009. 

But the story didn't end well. Eventually, it all came crashing down, resulting in the worst economic slump since the Great Depression. 

With the unemployment rate still excessively high and the real estate market showing few signs of rebounding, the American middle class is still reeling from the effects of the Great Recession.
Meanwhile, as corporate profits come roaring back and the stock market charges ahead, the wealthiest people continue to eclipse their middle-class counterparts. 

"I think it's a terrible dilemma, because what we're obviously heading toward is some kind of class warfare," Johnson said.

(emphasis added)

Public Utilities - Electricity, Water, Sewage... Vampire Squids?

In recently declassified testimony (why is this crap classified anyways??) given back in November 2009, Mssr. Bernanke had this response when asked about his thoughts on new financial reform...

I just want to say this as strongly as possible -- the reform will be a failure if we could not contemplate the failure of Goldman Sachs. That is, there needs to be a system by which Goldman Sachs will go bankrupt and Goldman Sachs’ creditors could lose money. If we don’t have that, then we might as well treat them as a utility, because that’s what they are.

Plebeian Inflation Report Feb 2011 - Food, Clothing, and Apartment Prices to Rise 10% to 20%

Who should we believe??  Oh yea, rent prices at Post Apartments are being raised approximately 20% for the year 2011.  But that's just one data point.  Surely, not everyone will raise their rent prices 20%... right??  If so, what will become of the summertime poolside redneck riviera festivals??

"Inflation is expected to persist below the levels that Federal Reserve policymakers have judged to be consistent... Overall inflation is still quite low and longer-term inflation expectations have remained stable" 

-Ben Bernanke 2/9/2011 

"Cotton has more than doubled in price over the past year, hitting all-time highs. The price of other synthetic fabrics has jumped roughly 50 percent as demand for alternatives and blends has risen. Clothing prices are expected to rise about 10 percent in coming months, with the biggest increases coming in the second half of the year... 

Mom-and-pop stores are most vulnerable because they have less power to negotiate better prices with suppliers than, say, Wal-Mart Stores Inc... Mary Hutchens, owner of Full of Beans, a 25-year-old children's clothing store in Chevy Chase, Md., worries that price increases could be a death blow. She said she has to discount heavily to stay in business and isn't sure she'll be able to pass along the costs."

-Associated Press 2/14/2011 

(Thanks for killing small businesses)

Edit:  I forgot to include that Kraft & General Mills (and presumably other food manufacturers) plan to raise prices... due to (drum roll) rising food prices... yay!

Detecting Asset Bubbles Before the POP

"...the Fed cannot reliably identify bubbles in asset prices"
Chairman Ben Bernanke, 2002

Some interesting commentary today from Google's CEO Eric Schmidt, which appears to reveal that there are people with 1) more clairvoyance than Mr. Bernanke or 2) more undeserved arrogance... history will tell us who is right (again, 1)

There are clear signs of a new Internet bubble in corporate valuations, Google's chief executive Eric Schmidt said in an interview with a Swiss magazine on Thursday.

Asked about the high valuations being put on companies such as social network company Facebook and game developer Zynga, Schmidt said in an interview with Bilanz: "There are clear signs of a bubble ... But valuations are what they are. People believe that these companies will achieve huge sales in the future."

The Wall Street Journal reported on Thursday that Google, Facebook and others have held low-level takeover talks with Twitter, valuing the company as high as $10 billion.