The Shale Evolution — The Federal Reserve & the Pursuit of Energy Independence

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Finding your target can be a bad thing. Ahead of the 2013 football season, the National Collegiate Athletic Association expanded the targeting penalty to include the ejection of the player who initiates contact with the crown of his helmet with the intent to hurt defenseless players in the head and neck area. Meting out a consequence of such severity, on top of the automatic 15-yard penalty, requires officials review the alleged contact via video replay. If targeting is confirmed, the player is ejected, and the team pays the price.

It was a different sort of league that a year prior, in 2012, wrangled with its own truth and targeting consequence. After two failed straw votes in 2010 and 2011, Federal Reserve Chairman Ben Bernanke finally prevailed in inking a target, but no penalty, into the Fed’s play book. To sway the skeptics, he compromised by offering up assurances that in exchange for his coveted 2% inflation target, he would not set a parallel unemployment rate target. Bernanke’s renege on that count wouldn’t arrive until that December, when the Fed set a 6.5% unemployment target, which proved to be an unmitigated disaster.

At that January FOMC meeting, Janet Yellen vowed that setting a 2% inflation target would mean, “the public will clearly understand our intentions to bring inflation back to the goal over time, rather than wondering whether the committee might allow inflation to drive upward indefinitely, as it occurred in the 1970s, or engage in opportunistic disinflation.” She had had similar debates with Alan Greenspan in the past and had not moved his thinking that no inflation was the best inflation.

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Danielle DiMartino Booth is CEO and Director of Intelligence at Quill Intelligence

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