Sometimes, between sleep and the time I fully awaken, I have this fantasy about the Federal Reserve Chairman. I imagine that Ben Bernanke will testify before an exasperated, desperate Congress someday and say something like the following, perhaps near the end of his term...
Despite what is essentially a depression, the stock market rocks on. The reason for this is that the stimulus is really aimed at appeasing the "free market conservatives" who populate Wall Street banks and the executive suites of our multinational corporations.
The next few weeks are critical in determining whether or not the economy is on a self-sustaining path.
On Saturday, President Obama stated that he wants the next chairman of the Federal Reserve to not just be an economic wonk but to actively promote policies that will advance the welfare of ordinary citizens. He may as well have described the resume of Robert Reich.
There are worse things in life than terrible phone manners, imperiousness and excessive confidence, but these traits have just become more relevant amid the disclosures that Larry Summers appears to be the front-runner to take over as Federal Reserve chairman assuming Ben Bernanke steps down early next year.
Reporters, journalists and stock market investors are fixated on Federal Reserve Chairman Ben Bernanke's statements about the Fed's $85 billion per month giant stimulus. A major problem is that there is no giant Fed stimulus.
As a man mired so deeply in Greenspan Economics, Summers is simply not capable of recognizing the dangers of letting the banking industry run fast and loose, or of grasping the wisdom of regulated capitalism.
Larry Summers is running hard to succeed Ben Bernanke as chairman of the Federal Reserve. This is a terrible idea. Once appointed chief of economic policy, Summers with Tim Geithner was a prime architect of propping up and bailing out the biggest banks, rather than cleaning them out and altering the conflicts of interest at the core of Wall Street's business model. Today, the banks are more highly concentrated, more profitable, and less in the business of financing the real economy than ever. This is Larry Summers' legacy. The prime alternative to Summers is Fed Vice Chair Janet Yellen, who is very much like Bernanke, only better. She has gone even further in expressing concern for the economy's persistent unemployment and in criticizing the bipartisan obsession with deficit reduction. Yellen deserves to be Fed chair purely on the merits. It pains me to write that if she gets the job, one other major contrast with Summers will weigh in her favor. She is female.
It's time for broad bipartisan support for critically important investments in young children. And we must get this right for children: not for test makers, not for adult interests, but for children -- especially the poorest children.
In his congressional testimony yesterday, Fed Chair Ben Bernanke called out the Congress. He warned them to stop the reckless and mindless spending cuts that are killing jobs and growth. His warnings fell on deaf ears in the Congress.
A consequential challenge facing the Fed and the U.S. economy is the risk of a gradual decline in this powerful institution's policy responsiveness, adaptability and flexibility. It is likely that, at some stage within the next few years, the Fed will need to exit from its highly-experimental monetary policies. The hope is that it is able to do so in an orderly fashion because its key objective is attained -- namely, that of promoting high and sustained economic growth with low and stable inflation. The risk is that the collateral damage of policy experimentation overwhelms the benefits. Having succeeded in temporarily restoring calm to the markets after the May/June upheavals, Mr. Bernanke still faces the more difficult challenge of regaining policy flexibility for an institution that is central to the well-being of the U.S. and that of the global economy.
I quote the following at length because it's so logical and well said. And remember, he's saying this stuff in the House of Representatives, where logic has been on an extended vacation.
Tell me it's a sick joke: Former U.S. Treasury Secretary Lawrence Summers, the guy who tops the list of those responsible for sabotaging the world's economy, is lobbying to be the next chairman of the Federal Reserve.
A candid Bernanke would explain to Congress that their insistence on debt hysteria is the leading problem slowing the U.S. recovery and that the Fed cannot counteract the harm that Congress and Obama are doing when they inflict austerity.
As the world financial markets (and a chorus of market commentators) react negatively to the latest policy guidance from the U.S. Federal Reserve and ...
Eighty five billion a month will seem tiny compared to the avalanche of the $1.863 trillion excess reserves exploding rapidly into the economy. That would devalue the currency, cause more rapid inflation and worry investors about a coming collapse.