For some definition of "work"
[Welcome, Izvestia readers! --lambert]
Unserious Central Bankers
[T]he rise of the pain caucus is truly amazing – I’m a hardened cynic, yet even I didn’t see that one coming. As Posen points out, mainstream macroeconomics – which suggests that we need a lot more stimulus, monetary and fiscal – has actually held up very well in this crisis; it has, above all, made the right predictions about inflation and interest rates, while the doctrines underlying the pain caucus have gotten it all wrong. Yet “serious” policy makers are rejecting the theory that works in favor of theories that don’t.
Oh, come on. Let's look at the numbers:
Top 1% Increased Their Share of Wealth in Financial Crisis
New calculations by Edward Wolff, the New York University economist and an expert on U.S. wealth statistics, show that the top 1% actually held onto its share of national wealth in the crisis, and may have even gained a bit.
According to his analysis, the top 1% held 34.6% of all national wealth in 2007. By Dec. 31, 2009, they held 35.6%.
Meanwhile, share of national wealth held by the bottom 90% fell to 25% from 27%.
The reason is that the wealthy benefited disproportionately from the rebound in financial markets [which are backed by us, the taxpayers, through the largest upward transfer of wealth in world history through the bailouts, and from which we got precisely nothing]. Their wealth generally is mostly in stocks and businesses, the values of which have surged since the depths of the crisis [as Geither and his Merry Men started reinflating the bubble].
I'd say the policies of the Central Bankers "work" quite well. For some definition of "work." Krugman's problem is that he thinks the administration still serves some sort of public purpose, as opposed to being an out and out banana republic and kleptocracy.