Brian Wesbury hit the nail on the head with his Op-Ed piece in the Wall Street Journal today (Monday June 23). I would provide a link, however the filthy capitalist pigs at the Journal require you to be a subscriber to view. (When the revolution comes, the Journal’s offices will certainly be converted to headquarters for the New Propaganda Daily). The main theme of his editorial is that the problem with this economy lies not in prevailing interest rates, and will not be solved through more cutting of said rates, rather the lack of velocity of money flow is what holds us back. Citing Irving Fisher’s brilliantly simple formula of (M)Money X (V)Velocity = (P)Price X (Q)Quantity , we can see that the Fed gets the most bang for its buck by exerting influence on V. I will let Mr. Wesbury’s piece speak for itself on how to do just that.
For an alternative viewpoint, visit my friend Andrew Strasmann’s site, which is updated daily with econ-o-pinion as well as hockey commentary.
Update: Here is the link to Brian Wesbury’s article. Since they obviously allow GKST to republish, I take back what I said about The Journal.