On Friday, Dallas Federal Reserve President Richard Fisher said the U.S. is "drowning in unemployment" and that the Fed's monetary easing was not the solution; certainty on taxes and regulation are what's needed to jump start hiring.
Mr. Fisher's comments, delivered during a speech at the University of Texas at Dallas, highlighted the intractable nature of unemployment over the last few years and the folly of so-called "quantitative easing" by the Federal Reserve.
"A short-term fix to the fiscal cliff will do nothing but push out the envelope of indecision and we will continue to be plagued by high unemployment," Fisher said. "We've had a recovery that is quite disappointing....We've never been here before so none of us know how we're going to navigate out of this particular quadrant of the liquidity pool in this ocean of money. And what I'm concerned about is that we may be painting ourselves into a corner," he said.
Mr. Fisher says the sluggish economy and unemployment picture are not the result of the Fed's lack of trying. Indeed, as Reuters notes, the Fed has held interests rates at zero and bought up over $2.3 trillion in long-term securities to tamp down borrowing costs. And yet, long-term unemployment remains at historic highs, with one in five American men now out of a job and record high 88,921,000 Americans no longer in the U.S. labor force.
"We've done a lot," says Fisher. "It's not clear to me despite our theoretical ability to understand the tools very well, in practice, how we are going to get out of this."
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