But the red line shows the number the Fed focused on, core inflation, which stayed low. Sure enough, the commodity price surge was a temporary blip, and runaway inflation never happened.
As I said, the Fed’s critics were decisively proved wrong. When it comes to evidence settling an economic dispute, the monetary events of 2009-2014 or so were as good as it gets.
But two funny things happened once the verdict of the evidence was in. First, aside from a vague mea culpa from Larry Kudlow, none – and I mean none – of the Fed’s critics were willing to admit that they were wrong. In 2014 Bloomberg contacted as many of the signatories of that open letter to Bernanke as it could, to ask what they thought given subdued inflation and a solid economic recovery. Not one was willing to admit that the letter’s warnings had proved incorrect.
Second, the people who got it wrong were if anything rewarded for their errors. Moore was wrong about everything during the financial crisis; he remained a fixture on the right-wing conference circuit, and in 2014 the Heritage Foundation appointed him as its chief economist. Kudlow, who dismissed those warning about the housing bubble as “bubbleheads,” and warned about looming inflation in the depths of recession, also remained a right-wing favorite – and is now the Trump administration’s chief economist.
So the attempt to install Moore at the Fed is right in character. And let’s be clear: The issue is not simply one of having made some bad forecasts. Everyone does that now and then. It’s about being consistently wrong about everything, and refusing to learn from error.
Recently Moore declared that the Fed is “filled with hundreds of economists who are worthless, who have the wrong model in their mind. They should all be, they should all be fired and they should be replaced by good economists.” Given the respective track records of the Moore and the Fed over the past decade and more, what he apparently means by the “wrong model” is a view of inflation that has repeatedly been proved right, as opposed to his own analysis, which has always been wrong.
But so far not a single Republican senator has questioned Moore’s qualifications. When it comes to right-wing economists, what we see is a clear pattern of survival of the wrongest.
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