Fed's NAIRU: Evil Enough to Unite Dems/GOP

Finally, as a result of a single line in the Federal Reserve’s FOMC statement and follow-up questioning during Fed Chairman Ben Bernanke’s press conference, we can return to a robust but decades-old debate which many believe Alan Greenspan ended 15 years ago.  The world now knows that Bernanke’s dedication to inflation targeting has suddenly transformed into an announced decision to target a 6.5% rate of unemployment.  The announcement was a surprise but the idea and reality that the Federal Reserve has strong ideological views on an acceptable level of unemployment is not.