John Taylor did a post this morning which he demonstrates that a) monetary policy was too accommodative for too long and b) a good portion (78%) of economists who think about this issue believe that policy helped to create the housing bubble. Thomas Hoenig's chart (which is reproduced her) should give all of us pause.
A second indicator of the folly of current national policy was in an Associated Press analysis of stimulus spending in construction. Their analysis suggests that the effect of all that dough was bupkis.
A third worry is that our statistics are a bit out of whack on unemployment. Depending on the model used to count employment and unemployment statistics our unemployment rate might be as much as 10% higher than posted figures. This is more than a technician's argument because it fundamentally affects a host of issues including the perceptions that Americans take about their situation.
Tie them together and we get ineffective policy, based on questionable numbers that helps to cause a serious inflationary cycle in the future. How audacious is that?
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