Yellin' Yellen's Yin-Yang

Ben Bernanke's Helicopter QE Money PolicyYin-Yang. In Eastern thought, two complementary forces make up all aspects and phenomena of life. Yin is present in even numbers. Yang is present in odd numbers. Their interplay on one another (as one increases the other decreases) being a description of the actual process of the universe and all that is in it.

The overall economic philosophy contrasting Yellen to Bernanke is their policy making. Ben acted upon market pressures of the moment instead of Yellen believing in the government wisdom to guide the economy constantly throughout - ever heard of socialism, communism? 

So, who is 'Yin' or 'Yang' here?

Ben is a 'Milton Friedman,' 'free-market laissez-faire' economist, but with some of his own 'momentus intervention' such as 'quantitative easing', QE, aka 'printing money and buying back our bonds' to buoy up U.S. currency while creating inflation - contrary to Milton Friedman's basic precepts.

Janet is a 'Maynard Keyes,' 'government centrist' economist, but with a 'James Tobin' twist, as a 'reconstructionist' about unemployment as the central focus over maintaining price stabilities to control inflation. She embraces the 'Phillips Curve' and 'NAIRU', non-accelerating inflation rate of employment, the trade-off between inflation and unemployment which means always doing the fine-tuning and meddling micro-management.

In the 'new Keynesian' theories, it assumes recessions are caused by some economy-wide market failure. So, Keynesian economics provides a rationale for government intervention into the entire economy, such as countercyclical monetary or fiscal policy. That means people are not circulating enough money and the Central Government needs to get more cash out into circulation with lower interest rates on bank loans and to increase numbers of recipients for Federal benefits to put into their open hands more money to spend.

This alternating sequence of expansion and contraction in economic activity is imperfect to say the least, unpredictable to say more which leans toward outright clairvoyance riddled with glitches in deciding future events. It does take from months to years to affect different sectors of the U.S. economy; i.e., finance and banking are immediate as monies flow directly from the Federal Bank, businesses and industries are cyclical due to seasonal changes, business cycles, or technological advances can take up to years while sporadically infusing funds. So, instead of letting the 'marketplace' dictate QE timing, the 'new-Keynesian' economists forecast with their crystal balls the 'marketplace' timing of QE - just like a coach that flips a coin on whether to put a player in the game.

So, Janet says, "Let's start up the printing presses, it's QE 'funny-money' time!"  Bring out large wheelbarrows too. You'll need a bunch more bills to buy bread at $6/loaf, milk at $8/gallon and gasoline at $12/gallon.

It's again like the German Weimar Republic (1919-1933) In 1919, one loaf of bread cost 1 mark; by 1923, the same loaf of bread cost 100 billion marks.