Not only does Sarah Palin understand quantitative easing, but she also
reads The Wall Street Journal more carefully than its own reporters.
How do we know? Because she said so on her Facebook page.
The post was in response to Journal writer Sudeep Reddy's criticism of Palin at the Real Time Economics blog. Reddy objected to Palin's take on the Fed's new quantitative easing program, saying she exaggerated the connection of quantitative easing to elevated prices. Explained Reddy:
Well if that's the case, responds Palin, why did Reddy's own paper say otherwise? "Just last Thursday, November 4, I read an article in ... [The] Wall Street Journal titled 'Food Sellers Grit Teeth, Raise Prices ... .'" Palin quotes part of the article saying that "prices of staples ... have risen sharply in recent months."
Unlike most U.S. economists and politicians, however, Palin tries to draw the concerns about quantitative easing to inflation today and falls short. She says, "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."But grocery prices haven't risen all that significantly, in fact. The consumer price index's measure of food and beverages for the first nine months of this year showed average annual inflation of less than 0.6%, the slowest pace on record.
Then comes her parting shot: "Now I realize I'm just a former governor and current housewife from Alaska, but even humble folks like me can read the newspaper. I'm surprised a prestigious reporter for the Wall Street Journal doesn't."
Sarah Palin already made it onto last week's list of Things The Wall Street Journal Hates. We're guessing this won't improve relations.
Update: Reddy has responded to Palin. "While some items in the shopping cart have risen in price (ground chuck beef is up 4.8%)," writes Reddy, "and others have decreased (bananas are down 5.3%, overall food price inflation has been historically low for the past year." The article Palin originally read actually "noted" this, he adds, calling 2010 "'the tamest year of food pricing in nearly two decades.'" This, explains Reddy, is the crucial difference: most "critics of the Fed's quantitative easing policy" are worried about "future inflation"--Palin was saying that there has already been significant inflation. That's not borne out by the numbers.