If you’ve been reading along for a while you know my thoughts on the “salve” that is QE2. Almost all the reasons publicly stated are a front for “asset price manipulation”…. and potentially setting the table for new “workaround” bailouts of states (munis) or banks (MBS).
But let’s go with the (wink wink) theory that the Fed somehow can create jobs. Bernanke defended himself yesterday by saying he will create 700,000 jobs over the next 2 years via QE2.
Bernanke told lawmakers the program could create 700,000 jobs over two years. Bernanke made the comments during a private meeting with members of the Senate Banking Committee, according to Sen. Richard Shelby, R-Ala., and others who attended the meeting. Bernanke was citing research done by the Federal Reserve Bank of Boston.
Let’s give him the benefit of the doubt – of course there will be no way to ever prove or disapprove such theories. (but if the Fed were such a great job creator, I say let’s ban the private sector – it’s highly inefficient compared to a central overlord) If accurate, for the mere cost of $857,000 per job, Bernanke will bring us 700,000 new jobs in the next 24 months. Apparently all these jobs will be brain surgeons, entry level professional baseball players, and wall street bond traders…. based on the pay scale. Or we’re vastly overpaying for the newly minted nail technicians and account receivable clerks….
By this measure, the poorly designed $800B stimulus plan of early 2009 was a bargain indeed! I believe all the jobs “created or saved” only cost us around $130K a head (don’t quote me on the exact number). Who knew!?? Pelosi is a far better steward of money then Ben!
Using Bernanke math, all we need is about $6.5 Trillion of QE and all 8M jobs lost during the Great Recession will be regenerated. So QE3 thru QE9 should do the trick.