The Federal Reserve today announced it would start dialing back its “quantitative easing” stimulus measure next month. Despite Wall Street’s complaints that the policy was encouraging too much stocks speculation (because it discouraged investments in U.S. treasury bonds), outgoing Chairman Ben Bernanke had previously pledged to keep it going until certain indicators of economic recovery were met. Apparently he now feels the jobs market outlook — not the actual numbers — is positive enough to satisfy his terms. The Democratic nominee to replace him, Janet Yellen, is going along with it for the moment, although she tends to be more strongly in favor of emphasizing employment goals over inflation goals.
Meanwhile, in Real America, rising stock prices are utterly irrelevant because they aren’t translating to higher wages for the workers at those companies and because more than half the U.S. population doesn’t own any shares anyway. Plus, there are still more people looking for work than there are jobs available. But by all means, let’s save Wall Street speculators from their own out-of-control greed to prevent them from re-bubbling and then re-crashing the economy while they play around with their spare money instead of being “job-creators.” Time to taper stimulative measures despite persistently low job growth because big-money investors are too eager to gamble in the markets.
