Tom Harkin: “Again, I am also concerned that the nominees that will be shortly before us to the Board of Governors seem equally…”

“Again, I am also concerned that the nominees that will be shortly before us to the Board of Governors seem equally frightened by this ghost of inflation. For example, nominee Roger Ferguson said in his testimony before the Senate Banking Committee, "Therefore, I agree with the Fed's historic approach"--I would challenge that word "historic approach"--"to reduce monetary stimulus before the emergence of obvious and strong inflationary pressure. Unfortunately, the timing and appropriate amount of change in monetary policy involves some guesswork and some risk taking." He agrees with the Fed's historic approach. It seems to me the historic approach of the Fed back in 1933 was to facilitate commerce and keep employment high. Only in 1978 was it added to keep inflation in check. Mr. Ferguson's view is not a comforting thought given that we have a chairman of the Federal Reserve System who has echoed that comment when he said, "economic understanding is imperfect and measurement is imprecise." That is interesting. Mr. President, if measurements are not perfect, can we assume the Fed knows what it is doing when it launches one of its preemptive strikes? Maybe all it is doing again is simply raising the corporate profit rate and cutting down median weekly earnings. This is what is happening.”