Political Celebrity

Sarah Palin’s misguided remarks about Barack Obama’s misguided monetary policy for quantitative easing (QE2) further exposes how she is just another celebrity who cites “experience” in politics, but in reality has no clue about policy details without the benefit of talking points delivered by paid consultants.

The National Review reported on the following remarks about QE2 prepared for Palin:

I’m deeply concerned about the Federal Reserve’s plans to buy up anywhere from $600 billion to as much as $1 trillion of government securities. The technical term for it is “quantitative easing.” It means our government is pumping money into the banking system by buying up treasury bonds…

All this pump priming will come at a serious price. And I mean that literally: everyone who ever goes out shopping for groceries knows that prices have risen significantly over the past year or so. Pump priming would push them even higher. And it’s not just groceries. Oil recently hit a six month high, at more than $87 a barrel. The weak dollar – a direct result of the Fed’s decision to dump more dollars onto the market – is pushing oil prices upwards.

Food and energy prices, significant in household spending and included in “headline inflation,” can be extremely volatile in the short run due to temporary disruptions in supply.  This is in contrast to “core inflation,” which excludes food and energy prices but is considered by economists to be a more accurate reflection of economic conditions.

But “inflation scare,” a term used by Frederic Mishkin, former governor of the Federal Reserve, best defines the current debate about the economic environment, with record prices for raw commodities in emerging markets.

It’s also another term that appears to be beyond comprehension for the celebrities comprising the political elite.

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