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Malleable and Ductile

Summary:
Those are two characteristics of gold … and of Judy Shelton’s economics. From Deutsche Bank today (Luzzetti & Hooper): [Judy Shelton’s] policy leanings have appeared fluid in recent years. During the Obama Administration, Shelton was critical of the Fed’s expansionary monetary policy. In a Wall Street Journal op-ed, she argued that the Fed’s efforts to raise inflation to 2% were misguided…. In making her arguments, Shelton admonished then Fed Chair Yellen to heed a key lesson from Arthur Burns’s tenure as chair. She said that tenure was “tarnished by the perception—borne out by the Nixon tapes—that he [Burns] succumbed to presidential pressure to conduct expansionary monetary policy to spike economic growth in the run-up to the 1972 election.” More recently, Shelton has changed her tune

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Those are two characteristics of gold … and of Judy Shelton’s economics. From Deutsche Bank today (Luzzetti & Hooper):

[Judy Shelton’s] policy leanings have appeared fluid in recent years. During the Obama
Administration, Shelton was critical of the Fed’s expansionary monetary policy. In
a Wall Street Journal op-ed, she argued that the Fed’s efforts to raise inflation to 2%
were misguided…. In making her arguments, Shelton admonished then Fed
Chair Yellen to heed a key lesson from Arthur Burns’s tenure as chair. She said that
tenure was “tarnished by the perception—borne out by the Nixon tapes—that he
[Burns] succumbed to presidential pressure to conduct expansionary monetary
policy to spike economic growth in the run-up to the 1972 election.”

More recently, Shelton has changed her tune significantly, arguing that the Fed
should cut rates further to allow the economy to grow faster in response to “reduced
taxes, less regulation, and dynamic energy and trade reforms”. She has also argued
against the Fed’s current operating framework with abundant reserves…

As I’ve documented in previous posts (consolidated here, and shown below in Appendix), she also has an incoherent view on (1) currency manipulations, and a (2) paranoic view on government statistics. And this is the person we want to be a Fed governor?

Appendix

Documentation:

Judy Shelton Confuses Me (Part 2,432,671)

What Does Judy Shelton Believe GDP Growth and Inflation Are in 2019?

Judy Shelton Confuses Me: On Interest Rates, Currency Manipulation

“White House Considers Economist Judy Shelton for Fed Board”

This Makes No Sense

This graphic summarizes my feelings:

Malleable and Ductile

Menzie Chinn
He is Professor of Public Affairs and Economics at the University of Wisconsin, Madison

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