The Bullard controversy

There appears to be differing views as to the recent market dust up and subsequent “repair” involving St. Louis Fed’s James Bullard. I’d like to say that it doesn’t mean that much either way because ordinarily I desire peace and tranquility above all else. And perhaps, since Mr. Bullard did his utmost (?) to halt the damage wrought with his glib and disgraceful demeanor, Scott Sumner has a point; that it’s a sign of maturity gained, and he’s on his way to becoming a superb central banker able to back away from mistakes and possibly learn from them (mostly my words, not his).

But these are extraordinary times not ordinary ones that have been quite impactful to nearly everyone who uses dollars, some more than others and even those who have yet to be born. And it isn’t as if Mr. Bullard is green. He is one of the first central bankers I can remember being nailed in the MM blogosphere for his rather extraordinary hawkishness five years ago; a sin he repeatedly committed even as ordinary people were hurting. He cared not, citing credibility and inflation concerns in public while quietly publishing a paper on how the US should avoid becoming Japan. Mr. Bullard knew the problem was tight money and that the US was dangerously close to monetary ruin, yet his public behavior all throughout the economic crisis was as if he did not know; the same kind behavior that finally got him into trouble on October 9th.

It is certainly reasonable to question, then, his intent not only on October 9th, but during the Great Recession as unemployment had spiked and persisted at a markedly elevated level as he had personal knowledge of the real problem and continued to beat the tight money drum. Though, it probably doesn’t necessarily matter because those nest eggs broken through persistent carelessness cannot be unbroken whether I can understand his actions or not. Even now, after he recanted, the DOW is still nearly 700 points lower. How is he going to make the people with the broken eggs whole? Maybe it helps to not think of the people behind his tragic mistakes to give him a pass for effort. But I still have quite a handful of broken eggs to contend with.

It’s true, he did not hurt me this time around. But that was because I had defensive positions – thank God. I knew he or one of the other self-serving, intellectually dishonest hawks would do exactly as Bullard and I do not need to be reminded of what destitution means a second time. And just imagine what kind of economy we’d have if everyone decided they needed to protect themselves from them, as they have arguably done for years, diminishing the efficacy of any monetary stimulus effort. They wrought economic damage just from existing.

And I’m not now, nor will I ever be of the opinion that we can’t miss what we’ll never have, or even worse than that, that it’s all good to take things away from people just because, or for what they dream up as the greater good, or whatever other nonsense these serial hawks will heap on us tomorrow. The senseless and monetarily sadistic behavior has got to stop! It has to stop, even if means Mr. Bullard, the “superb central banker,” has to take one for team hawk. In fact, we do not need to buy any more assets – just jettison the entire team.

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