The former Vice Chairman of the Fed and current economics professor of economics at Princeton University, Alan Blinder, has a must-read column in today’s Wall Street Journal entitled “A Tale of Two Downgrades” where he properly fillets S&P’s downgrade of the US while raising the alarm about the Fed’s recent policy action.  

He brilliantly translates the Fed policy announced at its last meeting:  “Meeting on Aug. 9, the Federal Open Market Committee (FOMC) downgraded its near-term assessment of the U.S. economy sharply. Since the Fed’s code of conduct mandates the use of Fedspeak instead of English, let me offer a quick translation: ‘Yikes! Things have sure deteriorated quickly!'”

Blinder then discusses the dire implications of all this, which I also discussed in a post on August 13, 2011 entitled “Unexpected, Unprecedented, Stunning and Tragic.” 

Reading Blinder makes me think I might have understated things………….