● The Postcatastrophe Economy: Rebuilding America and Avoiding the Next Bubble
by Eric Janszen
Excerpt via Street.com
“The bright side of the crisis we’re currently facing is that it could serve as a political forcing function for the United States to develop its competitive muscle and eliminate its dependence on foreign borrowing and oil — the main source of our current problems. To execute a true restructuring plan requires strong and uncompromising leaders who are willing to level with the American people, to explain the seriousness of our problems, the sacrifices we all must make to solve them, the new and better nation for ourselves and our children that we will enjoy if we do, and the disaster that awaits us if we fail to meet this challenge.
That sounds good, but how? I argue that we can nurture the seeds of a new American industrial economy — a productive economy that generates profits from technological industries such as computers, biology, medicine, and high-technology materials — by cultivating next-generation transportation, energy, and communications infrastructure. ”

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►Can the Fed Offer a Reason to Cheer?
Tyler Cowen/NY Times
The economy needs help, but monetary policy, which is the Fed’s responsibility, has not been very expansionary. This is true even though the Fed has increased the monetary base enormously since the onset of the financial crisis…If the Fed promises to keep increasing the money supply until prices rise by, say, 3 percent a year, people should eventually start spending. Otherwise, if they just held the money, it would be worth 3 percent less each year…
In failing to push harder for monetary expansion, is Mr. Bernanke a wise and prudent guardian of the limited discretionary powers of the Fed? Or is he acting like a too-hesitant bureaucrat, afraid to fail and take the blame when he should be gunning for success?
We still don’t know which narrative is more accurate, but the Fed is not receiving enough signals of support from Congress.
►US Inflation: What is the “Trimmed Mean” CPI and What Does It Tell Us?
Ed Dolan’s Econ Blog
Monthly inflation figures can sometimes signal a turning point in inflation, but those turning points are just as often masked by random noise. At present, the core CPI and trimmed mean CPI show that US inflation is still on a downward trend. Expect the Fed to stick to its easy-money policy until the trend shows a clear upward turn.

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