The fact that the Federal Reserve could be doing much more to stimulate the economy—but so far has chosen not to do so—is finally getting some prominent corporate media attention. The New York Times wrote today (7/15/10), referring to Fed chair Ben Bernanke:
As Mr. Bernanke pointed out in a speech in 2002, when he was a Fed governor, a central bank that has run out of ordinary tools to prop up the economy, like lowering short-term interest rates, still has other options to prevent deflation.
It’s good to see discussion of disagreements within the Fed. But these would be more useful if they acknowledged that the Fed’s board does not just have technical disagreements about how best to improve the economy; they have political differences over whether it’s worth fighting unemployment if there’s any risk at all of inflation. That actually existing extreme levels of unemployment are seen by a majority of the Fed as less frightening than purely hypothetical inflation relates to major role that private bankers play in the Fed’s governing structure—a crucial fact that is hardly ever mentioned in discussions of Fed deliberations.
See Extra! (6/10): “Framing the Fed as Financial Philosopher Kings: ‘Independent’ of the Public, but Not Bankers”
Progressives should not let themselves be cornered into this kind of Krugman-esque “should the Fed stimulate the economy?” discussion. This whole line of thinking pre-assumes a status quo where people’s needs are not the primary motivating force of productive activity.
The best way to “stimulate the economy” is to distributed demand-power (i.e., money) among all households rather than letting it remain concentrated. This could easily be arranged by setting a, say, $5,000 per person refundable tax credit.
Even Krugman has taken to discussing dropping money from helicopters (although, of course, the helicopter metaphor probably implies that the idea should be considered fantastic). Progressive should be pushing *this* kind of discussion into the mainstream.
Progressives can stimulate the economy by quitting the progressive movement and becoming conservatives.We need to recreate wealth in this country.Remove government constraints.Laugh off these fools who believe lack of regulation and government control caused our problems(it did not)Small governments.Return to personal freedoms.Tax cuts….this is all economics 101
I’m quite curious to know what you think did cause this massive recession, michael e.
Is it me or does it seem as if the more powerful conservative economic dogma has become in the US e.g. Trickle Down Econ. the lower the six-pack Joes of America standard of living has become. Sure they still might have all the neat toys toys to keep up with the Jones but they lack retirement security our parents had, the chance to pay all on their own kids college tuition. My guess is children and parents have never compared cost at certain stages of life e.g. first rental unit, home, interest rates on credit cards and so on. Today’s youth stay at home because they can’t afford to move out or even get married til later in life. I predict soon we will return to the 3 generation homes of our great grandparents while the uber wealthy will never set an actual foot onto the average Americans pavement and continue to bleed us dry.
On the Equal Party website, we nailed this topic already. More than once.
For the latest, click my name to go to the =Party website, and scroll down to
“Austerity and the 4th of July.”
The control of the money supply is the correct place to look.
The Fed is one step away from the actual control.
The solution is on the website, too.
Paid-to-Blog “conservatives” (supporting corporate interests)like some here are shills who’s aim is to both confuse and influence. Ignore them and just read the articles. Form your own opinions and stick to them.
to Martha Heinnz
Well Martha first what did NOT cause the meltdown.It was not the cost of the Iraqi/Afghan war.We were well able to handle the pentagons budget increase to fund it.A grain of sand in the ocean we have spent recently on madness.It was not wall street..These are the vultures that come after to clean the bones of the dead.They disgust you.They make money wether you are coming or going but they did not cause the sub prime mortgage meltdown.These are the red herrings.
What did cause it?Two words… Fanny and Freddy.For ten years before the meltdown I screamed to groups that this program of government forced housing to those who had no chance of paying for it was insanity.In effect I was told to relax that all was well.I watched as Bush tried 27 times to control this Dem/lib/socialist monster only to be shot down by Franks,Schumman,Dodd, and a host of other Dem lawmakers who said it was doing just fine.When the smokescreen put out by this administration disperses,history will not be kind to this bunch.
You can point to people living above their means(small potats).Or Bush deficit spending (yes he spent like a drunken sailor)Or an out of control FED (now your talking my language).But Fanny and Freddy kicked the beams out holding the house up.Then set the pile on fire with a thermo nuclear blast.I remember trying to reason with people On F&F.I was told I didn’t care for the poor.Bla bla bla bla bla.Same old lib clap trap.
Obama believes now he can spend more than every prez from Washington to Bush combined in 8 months .Believe me this was not a good thing.He has turned on the printing presses and the lights are on all night as the machines hum.Trillions in stimulus that accomplished little.And more to come.Massive taxes on the way to pay for massive socialist nanny state policies.Selling our very country to China and japan and anybody else for that matter.Massive government growth.Massive government intrusion(hey I wrote all this when he first started running)What caused this destruction is not capitalism or a free market economy or personal freedoms.These are the things that gave this country all it has ever had.If any attack be put upon these principles of economics …let it be said that sagging Socialism when introduced as a hybrid upon Capitalism can only survive with a roaring free economy to support it.When socialism drew too much water from the well…in this case it turned into a frenzy of thirst where everyone went without.The tome of socialism.
dear…well…everybody
the human race is speeding for extinction. we have like a decade to change course and then it’s too late. stop fighting for outdated, wasteful ways of living and join together with your brothers and sisters to fight for all our lives and for the future of the human race. Peace
I read this blog and its comments from time to time. Some good thinking is on display. This gives me hope that we might find a way forward other than recycled trickle-down nonsense from the 1980s. And after reading some of the comments herein, I’m also reminded of the wisdom of Voltaire’s comment that “I may disagree with his opinions, but I will defend to the death his right to speak them.” This is salutary. It gives us all the chance to witness the incredible “let them eat cake” screeds offered again and again by some fixtures here who endlessly argue for top-end tax cuts, less stimulus, and looser regulation of sectors now running amok. This lets us see and welcome how very much more value is on offer from the many other, more thoughtful and grounded contributors.
Of course Fannie & Freddie got out of control and reached into Goldman Sachs and Chase Bank and paid bonues that exceeded millions per year to everybody who worked there. Then Fannie & Freddie told Morgan Stanlet Derivative Sales Manager to tell his sales force: “theres blood in the water let’s go kill somebody” Which meant that after you bankrupt Orange County California go out and kill somebody else.
Then Fannie & Freddie told Greenspan,Rubin and Summers that we don’t need to regulate Credit Fefault Swaps that are worth 100 trillion dollars because they were risk reducing securities that made regulation unecessary. That was after Fannie and Freddies repealed the Glass Seagall bill that was passed after the Banking collapse of the 30s to prevent Wall St gamblers from using bank deposits to gamble with.
Oh that Fannie and Freddie are such bad guys.
In fact Fannie and Freddie are still bad guys because Goldman and Chase are still gambling with other people’s money and they are still paying unconscionable bonues and they are still too big to fail and they are still making billions while the 14 million people that became unemployed because of their gambling are fighting for their unemployment benefits that they already paid for.
Jim Greene
Jim you may hate the way so called bankers do business.And I agree with much you wrote about the way that the banking system and wall st does, and is doing business.(To believe they even paused under obama is a joke)They make money coming, and leverage to make it going.And they are backed by our tax dollars if they really skrew up..But that is private business.How about the FED?That is OUR money on loan to them…and we cant even audit to see what the government is doing with it.This government we should trust when they ask us to be angry at the banks for causing so much damage?So what is the seminal difference?It is two things.One Fanny and Freddy were wholly owned and operated by YOUR GOVERNMENT!They were a Democratic socialist experiment.When They brought everything down …and yes the sharks became even scarier than usual as they circled.Banks for the most part have, and are paying back the government loans with interest.Fanny and Freddy have no intention of ever paying back dime one.And have been extended unlimited funds for future borrowing.Wanna know the definition of insanity?
And what really angers me is the Dem leaders that I listened to all those years ago tell me that Fanny and Freddy were well and fiscally sound…..And that i just did not care for the poor when i screamed till blood shot outta my brain that this will be the death of us…..Those same men are now in charge of(wait for it)The banking reform legislation!!Jim wanna know the definition of insanity?
There is a world of wealth that the government is trying to control.Stupid.They would never have to control any of it if the offending parties new that the government would not ever again bail them out.But we have become a bailout society.Trust fund babies without a trust fund.
Don’t get lost in anger over massive bonuses.They are richer than you.Always will be- get over it.I see the real failure as governments.To little regulation on those thing they are charged to control.And too much on those things they have no business getting involved with.Capitalism works.Government interference…. in a free market place set new rules not in keeping with an honest economy.Now we have a new idea to fix everything.Massive growth of the government.Of their discretionary oversight, and lets face it…control of every ones life .
Wanna know the definition of insanity?
My definition of insanity is to watch Wall St Bankers gamble away 14 Trillion dollars throwing 8-15 million breadwinners out of work after sucking up millions of no document mortgages to securitize their gambling which caused an equal number of foreclosures and then say the problem is government … that’s insanity… or that is a cute political posture to allow the bankers, their investors and most of American busnessmen to continue to steal from the wage earners
When Ronnie Reagan said ‘government is the problem’ he meant let the bussnessmen continue to rape the resources of a magnificent land, allow the rich to get richer and prevent the wage earners from using Democracy to keep the stealing at a reasonable level.
The Wall St debacle of 2007-08,The Exxon-Valdez disaster, the Orange County bancruptcy, the Savings and Loan scandal and the commercial credit bust in Reagan’s last years show that the “get government off our backs” slogan is a Big Business request to allow them to keep stealing without publicity, without regulation, and without investigations that would show the people who is looking for a job, who is working and who is stealing
Jim G your definition of “insanity” occurred in an extremely regulated environment. And are you suggesting govt’s don’t “rape” the land and steal money from “wage earners”? Since the FED was created regulation has been increasing. If anything more regulation creates bigger scandals since everyone thinks they are safe. Plus regulations tend to consolidate power into fewer hands which means fewer bureaucrats to buy off. The economy is far too complex to be centrally controlled. As for “wage earners” they have always benefited most when the government stays out of the way.
hey girls i cannot wait 4 the expendables to come out! Its going to be awsum!
My partner and i trust your Dread Above Swine Flu Closes Schools in Iraq tiffany, excellent article.