In a newspaper opinion page, Professor Paul Krugman of Princeton University, a Nobel economic sciences laureate, cited “the Fed’s strange, destructive turn away from expansionary policy in 1932” in the midst of the Great Depression, arguing that “a key factor [behind the decision] was the complaints of commercial banks that low interest rates on government securities were squeezing their profits.” 8 Given that the monetary tightening led to a further deepening of the depression and deterioration of banks’ business conditions, the tightening clearly was a misjudged action that focused on narrow and fleeting interests.
Sometimes it is possible to be reasonably direct when talking to the public, as I believe we have been over the past few weeks. That is because we had a clear view about what needed to be done.