Casey Mulligan's article used to read:
The New York Times Publishes Casey Mulligan as a Joke, Doesn't It?: …the Fed lends money to banks on an overnight basis, at an interest rate called the federal funds rate…
As I said at the time:
The first joke [of three] comes in Casey Mulligan's first paragraph: the Fed does not lend money to banks on an overnight basis at the Federal Funds Rate. The Fed lends money to banks at an interest rate called the Discount Rate. The Federal Funds rate is the rate at which banks lend their Federal Funds--the deposits they have at the Federal Reserve--to each other. That's why it is called the Federal Funds rate…
They "corrected" it, to fix an "editing error".
His article now reads:
Casey B. Mulligan: Who Cares About Fed Funds?: …the Fed lends money to banks at the federal funds rate, the rate charged on overnight loans among banks…
For the second time:
THE FEDERAL RESERVE DOES NOT LEND MONEY TO BANKS AT THE FEDERAL FUNDS RATE!! WHEN THE FEDERAL RESERVE LENDS FUNDS TO BANKS, IT DOES SO BY ACCEPTING THEIR ASSETS AS COLLATERAL AND "DISCOUNTING" THEM, AND SO LENDS THEM MONEY AT THE DISCOUNT RATE!!!! THE FEDERAL FUNDS RATE IS THE RATE AT WHICH BANKS THAT HAVE DEPOSITS AT THE FED LEND THEM--OVERNIGHT--TO EACH OTHER!!!!!! THEY THUS LEND EACH OTHER THEIR "FEDERAL FUNDS" AT THE FEDERAL FUNDS RATE!!!!!!!!
This isn't rocket science, people.
People who can't get this right shouldn't be writing about finance or monetary policy.
People who cannot even get their corrections right shouldn't be writing at all.
Why oh why can't we have a better press corps?
