Is anemic growth the new normal?

Certainly very low interest rates, by driving liquidity into equities and assets in search of higher yields, are exacerbating the inequality that is disturbing American politics with distributional conflicts. Homeowners, and the 10 percent of Americans who hold 81 percent of the directly and indirectly owned stocks (the stock market is 160 percent higher than its 2009 low), are prospering. Those whose wealth comes from wages — formerly, the Democratic Party’s base — are losing ground. No wonder Hillary Clinton vows to “expand” Social Security, never mind its rickety financial architecture.

The public’s perception, and perhaps the Fed’s conceit, is that the Fed “manages” the economy. “We are,” Bullard says, “our own worst enemy.” By taking credit when things go well, it acquires responsibility in the public’s mind “for everything that happens.”

Bullard says “the most disturbing number” about the economy is that for five years productivity has grown only half a percent a year. Still, he is not among those who are in a defensive crouch about immigration: “We have a great thing happening in that a lot of people want to come here and work.”