Coordination

Regarding Chairman Bernanke's speech at Jackson Hole tomorrow,  Pimco CIO Mohamed El-Erian (in an opinion piece for the FT) has the right idea: the Fed must not "run the risk of building another bridge to nowhere." That is, a third round of quantitative easing (this time: buying further out on the yield curve / MBS and agency purchases / something along the lines of "operation twist"?) will fail to effectively solve our country's economic woes. Bernanke's goal should not involve another leg of artificial stimulus; rather, he should devote all efforts to orchestrating tangible reform. Specifically, in the words of El-Erian, "a sustainable solution must...incorporate co-ordinated structural reforms on the part of agencies responsible for housing, the labour market, public finances, infrastructure and directed credit." Undoubtedly the most important part of the above proposition involves the notion of coordination. All too often we blame a single individual, body, or organization in the face of poor economic data, and a general unwillingness to concede greatly hinders meaningful progress. Our current situation, however, leaves no room for prolonged dissent.