Recession Vs. Inflation: Must There Be a Winner?

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"...which is more important? Creating jobs for more people? Or is it more important to increase the value of people's savings and induce foreign investment? If it's the first, allow a little more inflation. If it is the latter, fight inflation and weather slower job growth. At some point, the Fed will have to choose."
Chris, you seem to imply that job growth and low inflation are mutually exclusive. What you are refering to is the Phillips Curve. This theoretical relationship has been debunked by many economists, most notably Milton Friedman. There is no trade off between low inflation and increased job growth. Gather from that what you will, but to me that makes the potential flaring up of inflation to be the preeminent problem facing Bernanke and The Fed.

Ryan of OH 8:01PM August 17, 2008

...which is more important? Creating jobs for more people? Or is it more important to increase the value of people's savings and induce foreign investment? If it's the first, allow a little more inflation. If it is the latter, fight inflation and weather slower job growth. At some point, the Fed will have to choose.
"Yes, Bernanke is a "political" appointee, and yes, he is acting only to make Republicans look good for the remainder of Bush's term."
Whoever you are, Bernanke will also serve after Bush leaves. The Fed handles monetary policy for the United States, not just for what political party that is in power.

Chris of AZ 1:46PM August 15, 2008

If headline inflation is over 5% and Fed Funds are at 2% (while they bail out Bear Stearns), the most conservative people in America (the older bank CD savers) are being betrayed by their (supposedly) "conservative" politicians. Yes, Bernanke is a "political" appointee, and yes, he is acting only to make Republicans look good for the remainder of Bush's term.
If we have oil at very high prices because we cannot or will not bar non-producer, non-user, highly-leveraged speculators from the oil market, we are being badly served by our (supposedly) "conservative" politicians.
If the national debt doubles under a (supposedly) "conservative" president who started unpaid-for wars and cut taxes for those who could welll have afforded to pay them, you were "had".

of 12:36PM August 15, 2008