Is the Fed Physically — or Mentally — Exhausted?
Dan Gross looks at why Fed Chair Ben Bernanke doesn’t seem too concerned about job losses.He disposes of the usual explanations, and then posits two ideas:
“First, it could be that Bernanke and the Fed are simply exhausted. In 2008 and 2009, the central bank did everything in its power and then some to rescue the economy from depression. It took rates to zero, lent directly to companies, and expanded the Fed’s balance sheet massively . . . it bought $1 trillion of mortgage-backed securities . . . The Fed used up all its resources saving the system.
Second, it could be a failure of imagination. In recent years, Bernanke and the Federal Reserve have proved themselves to be poor predictors of how big macroeconomic trends—low interest rates, unregulated subprime lending, the rampant use of derivatives—can have negative social, economic, and political impacts. Whether it was forecasting continued growth as the economy was about to slip into recession, or underestimating subprime losses, Bernanke hasn’t shown much clairvoyance. So perhaps it’s not surprising that the Fed doesn’t see how persistent long-term unemployment can erode labor force skills. Or that it doesn’t fully grasp how a spell of high long-term unemployment—something we haven’t seen in more than a generation—can harm the economy at large.”
I would posit simpler third option: The Fed cannot do anything about high employment because they are simply powerless.
That, unfortunately, is a much longer conversation. Meanwhile, go read what Dan wrote.
>
Source:
Get Me a Job, Ben!
Fed Chairman Bernanke doesn’t seem to care about high unemployment. Why?
Daniel Gross
Slate, June 24, 2010
http://www.slate.com/id/2258099/
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June 24th, 2010 at 2:52 pm
“I think it’s more mental, no? i mean they still are doing plenty physically — the MBS purchase is still ongoing, though just about done. They’re not raising rates, etc. And I supposed there’s more they could do. But the problem really lies in fiscal policy now. That’s not the Fed’s job. But, Bernanke still has enormous credibility in the markets, in the corporate world, and on the Hill.
Imagine if he gave a speech where he talked about the failures of the Fed, about the tragedy of long-term high unemployment, about the dangers of structural unemployment, aoubt how high unemployment is very bad for big business, for the markets, for banks, and for the future fiscal state of the country. And then conclude by saying that he’s surprised the political system isn’t doing something about it –and should be. What form that action takes — tax cuts, tax credits, public works spending, fixing the Metro North and LIRR trains so they’re not embarassments, helping the states so they don’t become 50 little Hoovers – should be left up to the policy makers.
The bizarre thing is that this is shaping up as something of an echo of the Great Depression, which Bernanke studied in detail. And he vowed that the Fed wouldn’t let it happen again. So he surely knows the great FDR quote:
Right now, on unemployment, we’re trying nothing — or nothing beyond what was enacted in the stimulus 15 months ago.
June 24th, 2010 at 3:02 pm
Ahhh, but you are now making the argument that it is either ideological or political — that he could, but won’t.
I think he simply cannot!
June 24th, 2010 at 3:03 pm
I vote third option with a little classic ivory tower detachment/cluelessness about the “real world” mixed in.
June 24th, 2010 at 3:09 pm
They can’t fix the problem because they are an integral part of the problem. Doesn’t take much in the way of thinking to understand that the cycle breaks down when the vast majority of participants owe it instead of own it. Inadequate money, concentrated in the banking system, cannot settle existing debt.
June 24th, 2010 at 3:14 pm
Edward Harrison of Credit Writedowns and Naked Capitalism has often weighed in that Obama looks more like Hoover than he does FDR at this point, and has been warning against this very thing that’s playing out now. Very prescient on his part.
June 24th, 2010 at 3:14 pm
Another possibility is that Bernanke sees unemployment as a proper response to things like minimum wages … that so long as 90 (or even 80) per cent of the work force is gainfully employed, that unemployment is simply not a problem.
However, if banksters were facing 10% unemployment, it would be a crisis of monumental proportions!
June 24th, 2010 at 3:16 pm
Still think Bernanke is led off in a straight jacket accompanied by two orderlies.
June 24th, 2010 at 3:17 pm
@Dan: I think it’s also a little of this:
“It could be a class issue. Federal Reserve Governors and tenured Ivy League economists simply don’t know many people who are unemployed.”
Same can be said of Congress, the President and our other “leaders” in the corporate world.
June 24th, 2010 at 3:17 pm
But BR is right — so long as the economy is seriously broken, with deflation afoot and oodles of toxic debt masquerading as assets, there is absolutely nothing the Fed can do to spur employment.
If you want employment, fix this broken economy … and start by fixing the financial industry.
June 24th, 2010 at 3:19 pm
What good are low interest rates? M2 money supply year-over-year growth rate is about to negative. The big problem with the FED is that they are not independent. Their charter says that they are but that’s a lie.
June 24th, 2010 at 3:20 pm
@constant: So true! LOL. If bankers unemployment were that high, Benny would be running around with his goatee on fire.
June 24th, 2010 at 3:23 pm
I think of it this way. If Ben says things are great, things are okay. If Ben says things are okay, things aren’t okay. If Ben says we’re screwed, WE’RE SCREWED.
June 24th, 2010 at 3:28 pm
Coming back to the theory that the Fed is outa ammo, for a moment, what happens if we get another crisis similar to that which Ben averted?
After all, nothing has been structurally repaired, we still have financial entities playing chicken with insane amounts of leverage at the CDS casino, the sovereigns are in considerably worse shape currently (and getting still worse daily), and we still have ginormous amounts of toxic assets on our banksters’ books, disguised as actual assets with real value courtesy of mark-to-fantasy accounting.
I think it’s premature to say that Bernanke “saved” us. It was only a battle, and the war is far from over.
June 24th, 2010 at 3:31 pm
@constant: Well, many of us have been saying that it was very premature to say that “Ben saved us” since last year’s fake market free money sugar high and were summarily dismissed and laughed at. I’m still holding that view, although I’d much rather be wrong.
June 24th, 2010 at 3:41 pm
When will lender’s fatigue become a concern ? Printing money is exhausting. TBP readers should know that The Federal Reserve was launched during a midnight Congressional session 97 years ago. What’s happened since then is what we call history.
June 24th, 2010 at 3:48 pm
doesn’t know, doesn’t understand, doesn’t care – it doesn’t matter! the three stooges, ben, timmy, and larry, just like alan, hank and robert before them have different priorities. saving banks (that is banks, and not the system) takes precedence. everything is a very distant priority #2, #3, etc.
on a macro scale, until bank of america becomes The Bank of America (ie swedish model vs japanese) nothing will change… unless of course we’re about to become the subjects of an unprecedented ($5-10Trillion) QE….
June 24th, 2010 at 3:52 pm
Yep. You can’t fix real structural problems in the economy by manipulating numbers and pieces of paper.
Good try though.
June 24th, 2010 at 3:54 pm
i think this is not the Feds fight. even thought its part their reason for being. its like the consumer protection responsibility that they don’t do either. it has gotten away from their ability to do any thing about it. the private sector has exported the jobs, never to bring them back. and hasn’t been interested in creating more since 2000. so either we have way to many people (as it is now there are 5 job hunters for every job), or not enough jobs.
June 24th, 2010 at 3:55 pm
I’ll second what MA said . . .and what Chief Tomhawk said-
maybe BB needs some shock therapy
June 24th, 2010 at 3:56 pm
Hey! As long as Wall Street is happy and prospering, what’s the problem? That’s Bernanke’s number one priority.
Haven’t you ever heard of “trickle down”?
Perhaps, there’s nothing Ben can to do create jobs in a real economy, but anything he can do to force out money being gambled with by the elites in the market, and force it to instead be loaned to private industry including the little guys, is better than what’s going on now.
And then, the private equity firms are simply liquidating assets and banking the proceeds. Making matters worse.
Congress and DC policy to create jobs? What? DC has never experienced a depression or recession. So the referenced quote is dead on with that observation.
And let’s not forget tax policy is totally upside down for creating new jobs.
Nothin’ Ben can do there except stop letting the elites feed off cheap taxpayer money from the fed for their addiction.
June 24th, 2010 at 3:57 pm
Could it be that our system has just gotten too gigantic and the “economic and market” signals become muted because of it? I mean it becomes so easy to just sweep problems under the carpet until they become as someone earlier said – giganormous!
June 24th, 2010 at 4:06 pm
I would posit simpler third option: The Fed cannot do anything about high employment because they are simply powerless.
unless it is hiring a few interns and whatnot at the Fed- BR is on the money
June 24th, 2010 at 4:07 pm
Seems like just about every country in the Western World has made promises their taxpayers can’t keep. Greece is just the thin edge of the wedge. That is not a fiscal or a monetary problem, it is a moral one and they are the hardest to solve. The current crop of pseudo-leaders lack both the ability and the ethics to respond to the crisis. Their solution is to delay things as long as possible, making the problem worse along the way. Here in the US for the last 30 years the economy was built on debt and consumption rather than saving and production. That cannot go on forever and the readjustment to reality will be long and painful. Major parts of the economy were overbuilt on the premise of consumers spending beyond their means or extracting phoney equity from inflated home prices. The financial industry went crazy producing exotic products designed to create hefty fees but little or negative social value. Our leaders have sent the military around the Globe fighting wars we cannot win to maintain an Empire we cannot afford; senselessly killing thousands of Americans and untold foreigners and making us hated in critical areas. Who has the courage to stand up and even tell the truth let alone actually solve the problems?
June 24th, 2010 at 4:21 pm
I will venture to say- our leader’s blow- but what of the taxpayers?
talk about people wanting the cake and eating it too-
look at the BP debacle- everyone is aghast- but where is the grounswell of popular aupport for a gax tax- to limit demand and our oil wasting ways?
nowhere-
and where is the groundswell of popular support for increased age limits and means testing on Social Security?
nowhere-
and where is the groundswell of support for the elimination of a the mortgage interest rate deduction- you know- to help balance our books-
nowhere-
everyone is full of shit
June 24th, 2010 at 4:26 pm
I’m going to state the obvious because the obvious is apparently being lost in the shuffle: to the extent that an entity is a governmental agency, that entity doesn’t have the option of cherry-picking from it’s legislative mandate. The Fed MUST take steps to maximize employment — or that agency is breaking the law. That much is black and white.
Further, to the extent that the agency’s leadership believes that it cannot fulfill part of its mission — maybe with good reason — it must be accountable to Congress for why it is unable to do so.
One thing the Fed Res system does, and does very well overall IMO, is generate research papers. There is no reason why, at a minimum, it cannot engage in fact-finding research into employment prospects by industry. Ask industry leaders for a status on their hiring and the conditions they believe are necessary to hire in the s/t and further out.
I read Dunkelberg’s little gem earlier today:
http://www.ritholtz.com/blog/2010/06/failure-to-understand-the-issues-leads-to-misguided-legislation/
To build on Dunkelberg’s point: small businesses are only borrowing to even out cashflow these days, not to expand. Demand for credit is down. I’m guessing this might be part of what BR’s alluding to: the Fed can’t lower rates any more or do anything with monetary policy that’s going to jump-start hiring.
Does this expose the Fed’s max employment mandate as toothless/a sham?
June 24th, 2010 at 4:42 pm
“everyone is full of shit”
Damn. You said it first, Ahab.
The Fed can’t juice employment because the Fed doesn’t set the parameters for employment (wages, benefits, etc.) If you want 100% employment, remove all employer mandates. I don’t see how hard it is to understand that if there is an oversupply of a thing (like houses, labor) then the way to alleviate the oversupply is to allow market forces to bring down the price. All the Fed ever did to juice employment during the aughts was create an illusion of demand through its loose-money policies. It’s run out of ammo in that regard.
And please, I wish people would quit comparing this era to the Great Depression. Here’s a short list of some differences between now and 1931: Gold standard causing massive deflation; rising and youthful population base that would allow the possibility of growing out of the problems; incredible productivity increases attributable to the industrial revolution exacerbating demand issues; American world clout on the rise; militant labor unions preventing any decline in wages and benefits to ameliorate the gold standard deflation; far less overall wealth accumulated with which the social impacts of the economic dislocations could be mitigated, etc.
This is hardly the same world as during the Great Depression. If you want to understand the US monetarily, you need look at the last two decades in Japan. If you want to understand US economic prospects going forward, particularly as regards employment levels, look at Germany and to some extent, France. This ain’t the Great Depression. Not even close. It’s more like the Gradual Decline.
June 24th, 2010 at 4:52 pm
Transor Z said: “to the extent that an entity is a governmental agency, that entity doesn’t have the option of cherry-picking from it’s legislative mandate.”
It’s true the Fed is “quasi-gov’t”, so it has the dual mandate on inflation/employment. Though it does kind of raise the question what the mandate is on the “quasi-private” side if there is one.
June 24th, 2010 at 4:53 pm
TZ-
so which will it be price stability or full employment?
or neither-
and what’s to stop the new benchmark for full employment being adjusted to a 10% unemployment rate? Another observation- when assets plunge and stay depressed- then I guess we could say prices are stable. Same thing with rising asset prices- once they hit a plataeu. But what about while they are plunging or skyrocketing- how come no-one takes the Fed to court for botching one of their mandates?
just wondering
June 24th, 2010 at 4:56 pm
The Fed is doing the best job they can for the people they represent, the international banking community.
June 24th, 2010 at 5:07 pm
@ahab:
It’s supposed to be both. Kind of like a pilot is supposed to maintain air speed AND altitude. :-)
Don’t worry. As the long-term unemployed get discouraged and live off the grid in cannibalistic slave trading camps in the oil marshes of Louisiana, the official U3 number will go back down to 5%.
With respect to suing the Fed, I believe that Jonathan Lee Riches has been ably championing our freedom since at least 2006:
http://dockets.justia.com/docket/court-madce/case_no-1:2006cv10499/case_id-102607/
June 24th, 2010 at 5:12 pm
The Fed is owned by the biggest banks, banking holding companies and financial companies. It is used to assure their profits and wealth. That’s all.
Since its inception, however, the Fed has been presented as some kind of manager of the economy. That’s just a cover. No one should take that seriously.
June 24th, 2010 at 5:15 pm
We are entering an economic, demographic, monetary, and fiscal maelstrom. We are so dead and we don’t even know it.
“Human sacrifice, dogs and cats living together… mass hysteria!”
- Dr. Peter Venkman
June 24th, 2010 at 5:16 pm
Curmudgeon , what is the correct policy mix in terms of employment and monetary prescriptions for the Gradual Decline, seeing as it seems to be unavoidable?
June 24th, 2010 at 5:27 pm
It’s supposed to be both
TZ- kind of where i was going was that it doesn’t appear they have the abilty to do either- let alone one of the mandates-
As the long-term unemployed get discouraged and live off the grid in cannibalistic slave trading camps in the oil marshes of Louisiana, the official U3 number will go back down to 5%.
sounds like the book “The Road”- however I don’t remember unemployment figures being discussed in the story as there were only a handful of people left wandering around looking for someone to eat
June 24th, 2010 at 5:30 pm
I’m with Curmudgeon on the “gradual decline”. I think we’re in it now and it’s going to be a long, brutal super slow motion slog.
June 24th, 2010 at 5:32 pm
And you’re right, ahab. Most everyone is “full of shit”. We’ve reached a point where nobody is willing to sacrifice anything for the greater good, but like I said yesterday, with the right leadership, I think it would possible for this to happen. Unfortunately, the entitlement mentality pervades every corner of our culture, especially the top, so we likely won’t be getting any real “leadership” from any of those “insiders” any time soon.
June 24th, 2010 at 5:32 pm
ahab:
The Road: post-peak everything.
June 24th, 2010 at 5:33 pm
Ben shot his wad saving Wall street, he doesn’t have anything left for Main street but if Europe stages a Lehman II then it gets really exciting – need to start confiscating savings then – spend it or lose it!
June 24th, 2010 at 5:36 pm
@rktbrkr: 401k’s next?
June 24th, 2010 at 5:39 pm
Dems side with Wall Street again? What an utter joke and farce our political system has become.
http://www.huffingtonpost.com/2010/06/23/final-derivatives-showdown_n_623573.html
June 24th, 2010 at 5:47 pm
MA-
there is a movie out based on the book- pretty tough to watch- that depressing
manny-
the way I look at it- everyone wants what’s their’s (from the government)- but no-one else gets jack-
that’s why I laugh at the faux shock and horror- people are simply outraged while listerning to the radio in their car, in traffic, AC on- “goddamn that BP”- instead of – “hey- lets increase gas taxes”
or
shock and horror at food stamps and unemployment benefits- but what of all the middle class entitlements- like mortgage interest deductions-
It’s all a big show
June 24th, 2010 at 5:56 pm
skepticus: Monetary policy can affect employment rates, but it is a tenuous, multi-step process, so I don’t think the Fed has directly much power.
I think the best policy would be to quit tinkering with the money, and quit intervening in markets where prices aren’t behaving as we’d like them (e.g., housing). That includes trying to mandate a minimum price for labor or anything else (which is not something within the fed’s purview, except indirectly).
We are exceedingly rich, and can use some of our wealth to help those most pinched by the circumstance of allowing markets to find their prices, with things like unemployment insurance and other subsidies. I believe that if we allow markets to work their way, via the pricing mechanism, through oversupply problems such as are endemic right now, that we will all be better off in the long run. Price signals are the most efficient means of allocating resources, and efficiency, in the end, always determines economic performance.
The Gradual Decline could be alleviated by a rapid decline that clears away mountains of inefficiencies that two fat decades have wrought. If we could only stiffen up and acknowledge that without pain there can’t be gain, then we might actually bottom out and begin a Rapid Ascent. What’s happened up to now has done nothing but delay and make gradual the inevitable decline.
June 24th, 2010 at 6:48 pm
The problem simply is two fold:
1) They are limited in ideas that can help employment. The Fed does not control whether companies hire more people. The few ways that’s worked before like lowering interest rates have already been done and thus they lost on the few points of leverage they have. Now, it is simply a matter of time, waiting for the employer base to start up eventually.
2) The few ways they can directly influence employment is nigh impossible to enact with today’s political and social climate. Large scale stimulus (which unarguably helps short term employment) is impossible to enact right now because of the newly rediscovered deficit hawks who went into hibernation for a decade.
So they don’t know WHAT to do and the few things they do know, they CAN’T do.
June 24th, 2010 at 6:55 pm
Everyone wants to focus on government policy (tax and spend) as the solution. If the GD elites were just a little more civic minded and well-adjusted socially, in a civic sense, things might eventually get better for everyone. Government transfer payments do nothing to build a social bond.
But right now the elites have a life-boat mentality. $1M doesn’t get it done. Need 1$B.
It’s called social disfunction. As in Barry’s notion: now’s a great time to be buying luxury items. For sale for $14M, offer 8 and see what happens. Need some yard work? Why pay $20/hr, when you can hire someone for $7? Let’s deflate wages until everyone but the elites is living in the US on Chinese or Mexican wages.
I know. I know. Most just don’t get it.
June 24th, 2010 at 7:05 pm
Please see:
http://www.telegraph.co.uk/finance/economics/7852945/Ben-Bernanke-needs-fresh-monetary-blitz-as-US-recovery-falters.html
June 24th, 2010 at 7:58 pm
Why should such a rotten system be fixed? Seriously. Right now, the system advocates growing the population even though we only have the current technology to generously care for about a 1/10th of global population _sustainably_. You know, without plundering depleting resources from the planet and not giving any back.
Does anyone care? Sure, about the same amount who thought that house prices could ever go down… about 1%. Or that worthless paper money would ever default (Greece). We are all full of sh-t, as Ahab said, and pain is God’s way of telling us we are on the wrong track.
June 24th, 2010 at 8:40 pm
Yet the Fed is far from powerless at this point when it comes to creating ways to provide money to its favorite insolvent banks. Buying toxic debt (how many trillions spent on that?), for instance. If they can buy banks’ toxic debt, then they could conceivably prop up other sectors of the economy in the same way in order to “stimulate” the economy or create jobs. I don’t know if it would be legal, but it would certainly be part of the so-called mission of the Fed, and no more illegal than many of the actions they have taken in the past 2 years. I’m not saying that kind of manipulation is the best strategy, just that saving the favored insolvent banks has taken all the Fed’s effort, and the real economy, which provides employment, has gotten almost none. The billions spent on TARP pale in comparison to the trillions transferred to the banks.
It reminds me of people who wonder why we haven’t “won” in Iraq and Afghanistan. Apparently winning is not the objective. Extending the war is the objective. These wars resemble Vietnam in that way.
June 24th, 2010 at 9:02 pm
The Fed can’t do anything about the high unemployment by themselves. They need the fiscal side of government to create the jobs. If the Congress and the President created a massive public works program to the tune of trillions per year, they could build some really great, brand spanking new highway and transit infrastructure, and put tens of millions of unemployed back to work. The Fed could finance this largesse by buying special 30 year, 1% Treasury bonds – super duper QE. Once unemployment came down to a more normal level, they could ease off the accelerator. It is probably more the failure of imagination by the bufoons in Congress and the WH than any failure by the Fed.
June 24th, 2010 at 9:46 pm
BR..You said something about more Fed Stuff being “B-O-R-I-N-G!”
The whole damned financial SYSTEM is getting very “B-O-R-I-N-G!”
The NEWS is BORING…CNBC/BLOOMBERG, etc. is “B-O-R-I-N-G!”
We out here know things are bad…we can look around in our communties and see it’s bad. Some of us saw it at the end of the Dot Com Bubble, then the Credit/Housing Bubble as we heard our friends “Flipping and Buying stuff in Florida that we went down and saw was OTT/OVERPRICED.
We out here who were savvy were not ECONOMISTS or believing the CNBC HYPE over those years. We were rational Observers (lots of old folks in that group trying to warn their kids that the “SKY is NOT the LIMIT…you Will FLY AND THEN CRASH if you believe that!
Anyway….Deleveraging for Years is what it will be. Nothing much has value unless one has maybe a 20 year time limit. There might be “mini-bubbles” for some things that the New Wealth from Emerging Markets might want to buy for Tiffany and others to take advantage of. But, that’s THEM and NOT AMERICA…and even though the Greenwich Hedgfundes and others have mucho bucks….what fun is it anymore when poverty rules their country? They can move on of course to find greener and more welcoming pastures where they will be respected an their wealth will still make them feel “REALLY GOOD” but doesn’t it get stale when your own people think of you as USERS or PILLAGERS?
June 24th, 2010 at 10:04 pm
@DuchessGateau Says:
It reminds me of people who wonder why we haven’t “won” in Iraq and Afghanistan. Apparently winning is not the objective. Extending the war is the objective. These wars resemble Vietnam in that way.
—–
Yes..these wars are the same futile ones as Vietnam in some ways. Except the Oil in Iraq, the Pipeline and newly discovered (HA!..Russians knew they were there) Rare Minerals in Afghanistan that our soldiers don’t realize they are their to exploit for the Multi-Nationals.
What a FARCE with our TAX DOLLARS…but there are many who think it’s Welfare Queens/Unemployed/Pensioners and Downsided Americans in Vanishing jobs collecting Food Stampsand Social Security “Hangers On” who are fueling the Deficit…and THEY are to be Punished!
Topsy/Turvey World!
June 24th, 2010 at 10:11 pm
Mannwich Says:
June 24th, 2010 at 3:14 pm
Edward Harrison of Credit Writedowns and Naked Capitalism has often weighed in that Obama looks more like Hoover than he does FDR at this point, and has been warning against this very thing that’s playing out now. Very prescient on his part.
———–
I’m not an Obama Aplogist…but he inherited and incredible MESS and yet the Media Pundits put the whole disgusting, fermenting, stinking stew of deregulation, two wars (looking for Osama) and the Policies of the Fed under Greenspan and Clintonian Globilization Stategies facilitated by the BIG BANKS like CITI and now GOLDMAN and the others, on Obama’s Plate and Blame HIM for not fixing all he inherited.
If he’d come in like a RAMBO…he would have been Impeached by the Repugs.. (Remember..there are those who still believe he wasn’t born in American Hawaii) and even though McCain was born in Panama..when it wasn’t American…that doesn’t count the same as Obama being born in Hawaii.
Anyway….what HIPOCRACY! He is being run by the same folks who ran the Government for YEARS! Presidents these days have to answer to the THINK TANKS and MILITARY INDSTRIAL Complex. and NOT …we the people.
It’s hard to villify the hapless Obama who was chosen for this job when you know what he is up against.
He at least is a “Pleasant Empty Suit” compared to what went before. And, there are brains in that head…if and when he figures out if he can use them without being marginalized out of existence.
June 24th, 2010 at 10:13 pm
@Mannwich Says:
June 24th, 2010 at 3:14 pm
Edward Harrison of Credit Writedowns and Naked Capitalism has often weighed in that Obama looks more like Hoover than he does FDR at this point, and has been warning against this very thing that’s playing out now. Very prescient on his part.
———–
I don’t think he’s Hoover…but it would be easy to think that given the times we live in that might have folks comparing them to that earlier era..
I’m not an Obama Aplogist…but he inherited and incredible MESS and yet the Media Pundits put the whole disgusting, fermenting, stinking stew of deregulation, two wars (looking for Osama) and the Policies of the Fed under Greenspan and Clintonian Globilization Stategies facilitated by the BIG BANKS like CITI and now GOLDMAN and the others, on Obama’s Plate and Blame HIM for not fixing all he inherited.
If he’d come in like a RAMBO…he would have been Impeached by the Repugs.. (Remember..there are those who still believe he wasn’t born in American Hawaii) and even though McCain was born in Panama..when it wasn’t American…that doesn’t count the same as Obama being born in Hawaii.
Anyway….what HIPOCRACY! He is being run by the same folks who ran the Government for YEARS! Presidents these days have to answer to the THINK TANKS and MILITARY INDSTRIAL Complex. and NOT …we the people.
It’s hard to villify the hapless Obama who was chosen for this job when you know what he is up against.
He at least is a “Pleasant Empty Suit” compared to what went before. And, there are brains in that head…if and when he figures out if he can use them without being marginalized out of existence.
June 24th, 2010 at 10:20 pm
@TakBak04: I’m not blaming Obama for the mess we’re in but I AM blaming him for his tepid, weak response that did little to nothing to truly fix the problems that ail us, but instead rewarded the very people and system that got us here. When looking back on his failed presidency after his one term, he will rue the day that he sided with the banksters over Main Street. And don’t tell me he couldn’t have done more for Main Street. The guy had/has the bully pulpit. Use it. Do the right thing, consequences be damned. That’s what real “leaders” do and would do if we had any left in this country.
June 24th, 2010 at 10:21 pm
These times don’t call for tepid conciliation or compromise. Obama would be a fine president in “normal” times where those traits are a positive. These are far from normal times.
June 24th, 2010 at 10:37 pm
And the Senate has rejected the extension of Unemployment Benefits for the third time:
http://politicalticker.blogs.cnn.com/2010/06/24/jobless-benefits-extension-on-deathwatch/?fbid=_od3_UiOhtu
June 24th, 2010 at 11:11 pm
The stimulus from the beginning was not designed to create jobs. Lots of projects that were equipment and material intensive, but labor lite. Contractors complained about the delays in funding and that many of the jobs were so tiny they were hardly worth bidding on. The money did go somewhere though.
June 25th, 2010 at 12:06 am
Good one,
<>
What?
used up trillions as gifts and then some. This is not a rescue, it’s thieving.
$1 trillion of mortgage-backed securities: bad gambles from crooks who hope to make more out of nothing.
Those things should be banned, what exactly is their purpose?
If those Gentlemen fancy themselves as bookmakers, let it be so, in private salons where they can rip each other off and leave real life alone.
<>
No, The Fed did nothing but feed the pricks who caused the crisis.
And now it’s all about public debt, I wonder how that happened.
Meanwhile financial regulations are going nowhere, it’s a public debt issue, keep repeating it until we all forget how it started.
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Jesus Christ, you’re a few decades late, mate.
Those guys are into finance, the thing that sucks the life out of reality.
If they gave half a shit, they would have seen it long ago, they probably did, but they do not care about that small people business.
If politicians had balls on the other hand, they would look into what creates jobs and why we have lost so many over the years.
But not to worry, the Fed saved the day by lending directly to companies, lol , companies who so generously create stuff out of nothing, market creators, if they lose they get bailed out and if they win, they cash it in.
Nice try, but reads like a naive piece of propaganda.
June 25th, 2010 at 12:12 am
Sorry about the double post. got the keys wrong.
Good one,
“In 2008 and 2009, the central bank did everything in its power and then some to rescue the economy from depression. It took rates to zero, lent directly to companies, and expanded the Fed’s balance sheet massively . . . it bought $1 trillion of mortgage-backed securities . . . The Fed used up all its resources saving the system.”
What?
used up trillions as gifts and then some. This is not a rescue, it’s thieving.
$1 trillion of mortgage-backed securities: bad gambles from crooks who hope to make more out of nothing.
Those things should be banned, what exactly is their purpose?
If those Gentlemen fancy themselves as bookmakers, let it be so, in private salons where they can rip each other off and leave real life alone.
“The Fed used up all its resources saving the system”
No, The Fed did nothing but feed the pricks who caused the crisis.
And now it’s all about public debt, I wonder how that happened.
Meanwhile financial regulations are going nowhere, it’s a public debt issue, keep repeating it until we all forget how it started.
“So perhaps it’s not surprising that the Fed doesn’t see how persistent long-term unemployment can erode labor force skills. Or that it doesn’t fully grasp how a spell of high long-term unemployment—something we haven’t seen in more than a generation—can harm the economy at large.”
Jesus Christ, you’re a few decades late, mate.
Those guys are into finance, the thing that sucks the life out of reality.
If they gave half a shit, they would have seen it long ago, they probably did, but they do not care about that small people business.
If politicians had balls on the other hand, they would look into what creates jobs and why we have lost so many over the years.
But not to worry, the Fed saved the day by lending directly to companies, lol , companies who so generously create stuff out of nothing, market creators, if they lose they get bailed out and if they win, they cash it in.
Nice try, but reads like a naive piece of propaganda.
June 25th, 2010 at 5:32 am
I assert a fourth option. In the “Lords Of Finance”, after a meeting with foreign central banks, it was agreed that they would not lie re The Great Depression, but they would be very economical with the truth. And so the Fed may simply decide some things are better left unsaid.
June 25th, 2010 at 10:54 am
I believe the Fed is fiscally exhausted. Regan did it, not Bush! You Democrats really need to get your facts straight.
June 25th, 2010 at 11:18 am
Bernanke can fix unemployment just about as well as I can fix the French Wold Cup team. Which is to say not at all. Thats the job of the admin and Congress, who both are suffereing from a sever lack of imigination of what capital creation (aka job creation) is all about. Emptying the Treasury to keep paying Federal, State, County and Municipal union workers ‘upsized’ and voting ‘D’, while keeping the party happy, only worsens the long term situation. They have nothing politically to gain by actually trying to find ways to incentify domestic job creation, so politics being job #1, they will ignore the obvious for as long as Bernanke still has checks in his check register.
June 25th, 2010 at 1:13 pm
Mr. Bernanke missed the whole episode of 2007-2009. He has/had all the strings necessary to slow the economy irrispective of what congress or the W/H did! He chose not to use then.
June 26th, 2010 at 3:07 am
[...] would be necessary to sustain the Bailout. There followed articles wondering if he’s suffering from nervous exhaustion. It wouldn’t be surprising if Bennie’s nerves are cracking. He’s got one [...]