As Paul Krugman notes in his NYT editorial, most of the opposition to the Fed's recent policy statement is self serving: Germany and China are afraid that a weakening dollar might erode their large trade surpluses--trade surpluses on which their current economies depend. The Republicans don't want any success on the economy until they have milked the current recession for all the political gain they can manage.
More curious are the few "economists" who wrote an open letter to Chairman Bernanke asking him to abandon QE2 because it devalued the dollar and would cause inflation. Well, yes. That's the point of the policy. Make the dollar more competitive so US manufacturers can expand their markets and stop the downward spiral of price increases to help restore consumer confidence.
Just as curious (or from my perspective, more curious) are the few economists who have always been counted in the monetarist camp who now seem to have abandoned Milton Friedman and his view of how the economy works. Bernanke, it turns out, is more monetarist than they. QE2 is the exact prescription Friedman offered the Japanese when they faced a similar situation. Ironically Chairman Bernanke offered the same solution. He may be late to the party, but at least the Chairman has the virtue of consistency with respect to his view of the economy.
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