The Federal Reserve continues to be the key agency for fighting joblessness, and in a speech today Vice Chair Janet Yellen delivered an important address in which she endorsed the most realistic plan for delivering monetary stimulus.
The idea, originating with Chicago Federal Reserve President Charles Evans, is to tie future changes in interest rates to specific inflation and employment targets including an explicit commitment to allow the inflation rate to temporarily rise above 2 percent. Yellen says that "several" members of the FOMC back this kind of approach and she is "strongly supportive" of it. She also makes the key point that "if 2 percent inflation is the Committee's goal, 2 percent cannot be viewed as a ceiling for inflation because that would result in deviations that are more frequently below 2 percent than above and thus not properly balanced with the goal of maximum employment." Again, she's saying the Fed needs to be a bit more tolerant of inflation on the upside.
This is potentially a huge deal. Yellen is an important policymaker in her own right, and the Federal Reserve Board of Governors usually acts as a team so it's unlikely she'd be out there with this speech unless Ben Bernanke wanted to shift the Overton Window a bit.
As I've said before, we're getting a new FOMC for Christmas this year with Evans and Boston's Eric Rosengren joining the Committee and now it looks like the permanent board is also eyeing stimulus. That's excellent news for the American labor market.
TODAY IN SLATE
False rape accusations exist, and they are a serious problem.
Scotland Votes to Remain in U.K.
There’s a Way to Keep Ex-Cons Out of Prison That Pays for Itself. Why Don’t More States Use It?
The Music Industry Is Ignoring Some of the Best Black Women Singing R&B
Can Democrats Keep Counting on Republicans to Offend Women as a Campaign Strategy?
Theo’s Joint and Vanessa’s Whiskey
No sitcom did the “Very Special Episode” as well as The Cosby Show.
The Other Huxtable Effect
Thirty years ago, The Cosby Show gave us one of TV’s great feminists.