Paul Krugman: A Panicked Press Turns Economics Into a Morality Play

Recently the big, front-page headline on the Financial Times website - at least in the U.S. edition - led to an article about the Bank for International Settlements. According to the F.T., the bank is warning that "forward guidance" - the attempt to drive long-term interest rates down by promising to keep short-term rates low for a long time - "could endanger the international financial system." Typical B.I.S., I thought - the gnomes of Basel have been consistently against any policies that might restore full employment, and have been into punishment all the way. And I got ready to write a blog post bashing the organization.