From today’s column in general agreement with the Fed’s Quantitative Easing by Paul Krugman:
Core inflation — a measure that excludes volatile food and energy prices, and is widely considered a better gauge of underlying trends than the headline number — is running at just 0.6 percent, the lowest level ever recorded. Meanwhile, unemployment is almost 10 percent, and long-term unemployment is worse than it has been since the Great Depression.
So the case for Fed action is overwhelming. In fact, the main concern reasonable people have about the Fed’s plans — a concern that I share — is that they are likely to prove too weak, too ineffective.
But there are reasonable people — and then there’s the China-Germany-G.O.P. axis of depression.
China and Germany don’t want a more competitive American dollar. Republicans, of course, don’t want the economy to improve before November 6, 2012.
I wrote briefly why deflation is bad two years ago today — No happy endings.