Bernanke Visits Alternate Universe

Well then.  Apparently not everyone agrees that the Federal Reserve is having trouble balancing its dual mandate.  Rather, I should say that not everyone agrees about the nature of the imbalance.  From the Boston Globe‘s reporting of Ben Bernanke’s appearance in front of the Senate Budget Committee, we find this:

“It seems to me that you care more about unemployment than about inflation,’’ said Senator Charles E. Grassley, Republican of Iowa.

“I want to disabuse any notion that there is a priority for maximum employment,’’ Bernanke responded.

Bernanke deserves credit here for refraining from hitting himself over the head with a frying pan in response.  (Is this just a cynical form of “working the ref” or does the Senator really believe it?  If the latter, what more could possibly disabuse him of this notion?)  I suggested yesterday that you “don’t need to look very hard” to see that the Federal Reserve is doing much better at keeping inflation in check than at controlling unemployment—but you do need to look.

I’ll outsource the rest to the The Economist (where Ryan Avent performs the literary equivalent of hitting himself over the head with a frying pan):

During the second half of 2010, annual inflation stood at its lowest level in over half a century. Unemployment, by contrast, peaked at 10.0%. Only once in the post-war period did the jobless rate rise above that level. Only twice in the postwar period has the country experienced a recession that brought the unemployment rate above its current level, at 8.3% […] I’m left to muse that Mr Grassley must say good-bye when he enters a room and hello when he leaves, and wears his shoes on his head.