Nobel Winner: Fed Has Performed 'Abysmally'

In his testimony before a hearing of the House Financial Services committee, underway on the Hill right now, 2001 economics Nobel prize winner Joseph Stiglitz had harsh words for the Federal Reserve.

"The Fed has performed abysmally," said Sitglitz, a Columbia University professor now, referring to the actions of this Fed, chaired by Ben Bernanke. "Not only did it not do what it should have done to prevent the crisis, but it arguably contributed to the crisis."

Stiglitz said the Fed has focused too much on price stability and not enough on promoting growth and high employment.

"[The Fed] seemed to think that maintaining low inflation/stable prices was necessary and almost sufficient for economic stability and growth," Stiglitz said.

Here's a copy of his entire testimony.

-- Frank Ahrens