Most educated people have no idea how important the Fed is. I’m not the best guy to explain it to you, but since not everyone reads Paul Krugman, let alone Scott Sumner, I should say something…
These past few years we’ve really really needed a bit more inflation and its finally coming. Ben Bernanke recently announced that the Fed will finally do more to juice the economy. This NyTimes article about it gives too much space to the “conventional wisdom,” and pays too little attention to the economists who have been, for years now, arguing that the Fed should be more active. While not everyone agrees about the desirability of quantitative easing, the ranks of QE3 supporters have been growing and they include a diverse bunch: conservatives and liberals, monetarists and Keynesians of various stripes: Paul Krugman and Brad Delong, Tyler Cowen and Scott Sumner.
Glass half-full: I think the Fed has just given us a big nudge towards better times.
Glass half-empty: A lot of people are hurting in this economy, and its incredibly sad that the Fed didn’t do more sooner to help. This is arguably the most under-reported story of the recession. It didn’t have to be this bad.