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(Washington Post)   Bernanke to Congress: You're the problem   (washingtonpost.com) divider line 94
    More: Obvious, Bernanke, Joint Economic Committee, prepared testimony, fiscal imbalance, Chairman of the Federal Reserve  
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4000 clicks; posted to Politics » on 22 May 2013 at 12:50 PM (1 year ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2013-05-22 12:30:07 PM
 
2013-05-22 12:34:22 PM
Hero tag on furlough?
 
2013-05-22 12:53:30 PM
FTFA: ...the path that Bernanke has advocated countless times in past testimony: Focus on reducing the long-term sustainability of the U.S. government's finances

I think I've found the problem...
 
2013-05-22 12:54:24 PM
Dear Ben,

               that's why its called the CONgress.  Owned and Operated by Big Business and the Rich. we no longer have a Democratic Republic.  and the Big Business owned Press doesn't get real news to the Nations's citizens, so its a win win!  cheers!

yours truly,

Joe Citizen.
 
2013-05-22 12:55:01 PM
About farkin' time someone called out Congress on their recalcitrance.  Like him or not, he has a point.
 
2013-05-22 12:55:40 PM
Fark this guy.

Seriously? Advocating for tax cuts and deregulation? Whining about spending less on defense? How does spending half a trillion a year to chase Muslims around the worst parts of the planet help the ol' balance sheet?
 
2013-05-22 12:57:24 PM
"In particular," his testimony says, "the expiration of the payroll tax cut, the enactment of tax increases, the effects of the budget caps on discretionary spending, the onset of sequestration, and the declines in defense spending for overseas military operations are expected, collectively, to exert a substantial drag on the economy this year."

Are there any reputable economists that disagree with this? Serious question, I don't have an economics degree from a top 5 school or anything, but I know a little about coconuts and I find the subject interesting.
 
2013-05-22 12:58:35 PM

Uranus Is Huge!: Fark this guy.

Seriously? Advocating for tax cuts and deregulation? Whining about spending less on defense? How does spending half a trillion a year to chase Muslims around the worst parts of the planet help the ol' balance sheet?


It's like when Stalin would erase certain things from History. The GOP has erased Iraq from history. It's doesn't exist in their tiny minds anymore. Bush and Rumsfeld were great people! They helped get revenge on the mean old Taliban! Iraq? What's that?
 
2013-05-22 12:59:12 PM
When your economy depends on ever-increasing debt just to break even, you're screwed no matter what you do. Crash now, or crash harder later... those are our only two options. The idea that once the economy "recovers" you can stop borrowing and start paying down the debt (which would require cutting federal spending by at least $1.3 trillion per year to balance the budget, and even more to have a surplus) without the entire house of cards collapsing is insane.
 
2013-05-22 01:00:13 PM
It's easy for this guy to point fingers, but as the Fed chairman, he can set monetary policy without any oversight whatsoever.

I'm not going to say Congress is off the hook, because they have been terrible. But the economy is Ben's sphere of influence, and while he may have kept us from diving into the abyss, his conservative policies have prevented substantial, job-creating growth for the past 7 years.

Alan Greenspan, he ain't.
 
2013-05-22 01:00:27 PM
"In particular," his testimony says, "the expiration of the payroll tax cut, the enactment of tax increases, the effects of the budget caps on discretionary spending, the onset of sequestration, and the declines in defense spending for overseas military operations are expected, collectively, to exert a substantial drag on the economy this year."


Save for the decline in military spending because we are withdrawing troops, EVERYTHING on this list is a result of the GOP making the deficit their top priority.
 
2013-05-22 01:02:01 PM
A short recap of the article for teabaggers:

"In particular," his testimony says, "the expiration of the payroll tax cut, the enactment of tax increases,..blah,blah, blah....are expected, collectively, to exert a substantial drag on the economy this year."

If only we could find a two word solution to this problem.
 
2013-05-22 01:02:21 PM
i1168.photobucket.com
 
2013-05-22 01:02:50 PM

AverageAmericanGuy: he can set monetary policy without any oversight whatsoever.


Which he's done. If you read the article, or any of his previous testimonies, he's politely telling Congress "I'm out of moves here, get your sh*t together."
 
2013-05-22 01:02:53 PM

DrPainMD: When your economy depends on ever-increasing debt just to break even, you're screwed no matter what you do. Crash now, or crash harder later... those are our only two options. The idea that once the economy "recovers" you can stop borrowing and start paying down the debt (which would require cutting federal spending by at least $1.3 trillion per year to balance the budget, and even more to have a surplus) without the entire house of cards collapsing is insane.


Tell us more about how we are so in debt we can not recover.

qzprod.files.wordpress.com
 
2013-05-22 01:12:17 PM

Dusk-You-n-Me: AverageAmericanGuy: he can set monetary policy without any oversight whatsoever.

Which he's done. If you read the article, or any of his previous testimonies, he's politely telling Congress "I'm out of moves here, get your sh*t together."


Follow-up: can you explain what that exchange between Klobuchar and Bernanke meant for those of us who don't speak finance? I speak politics pretty well, and it sounded like Benny was playing off the question, but Slate makes it seem like Toto pulled back the curtain.

The Fed is supposed to track inflation and create jobs. Is Klobuchar wondering what happens when those two motives conflict (and Slate explains that that's what's happening now)?
 
2013-05-22 01:13:37 PM

Rwa2play: About farkin' time someone called out Congress on their recalcitrance.  Like him or not, he has a point.


and he has had that point for almost 2 years now.  every time he talks, he calls them out.

Dusk-You-n-Me:he's politely telling Congress "I'm out of moves here, get your sh*t together."

 THIS
 
2013-05-22 01:14:05 PM

DrPainMD: When your economy depends on ever-increasing debt just to break even, you're screwed no matter what you do. Crash now, or crash harder later... those are our only two options. The idea that once the economy "recovers" you can stop borrowing and start paying down the debt (which would require cutting federal spending by at least $1.3 trillion per year to balance the budget, and even more to have a surplus) without the entire house of cards collapsing is insane.


Umm the deficit has been going down and is projected to keep going down for the near future. So what the hell are you talking about?

You don't need to have a surplus you just need the deficit to shrink at a slower rate than GDP growth for it to become manageable. You really seem to have no idea what you are talking about.
 
2013-05-22 01:15:01 PM
It's not a problem at all.

Congress is making shiatloads of money for corporations that can leave America the moment something starts going wrong.

/why would they want to stop making money for the people giving them giant bribes?
 
2013-05-22 01:16:02 PM

Dr Dreidel: Follow-up: can you explain what that exchange between Klobuchar and Bernanke meant for those of us who don't speak finance?


I don't speak fluent finance but I think this is the key point of the article:

That's a huge tell right there. Bernanke can't name a single way in which his policy would change if congress rescinded his legal mandate to attempt to maximize employment. In other words, he's ignoring that mandate.

He's got two mandates. Inflation he can (generally) do something about. But he's basically ignoring the maximize employment mandate, I think because there's not a whole lot he can do about it in his position. That's where Congress is needed - legislation for stimulus, or another payroll tax cut or something similar.
 
2013-05-22 01:17:37 PM
Did you hear about those clowns in Congress? What. A. Bunch. Of. Clowns.
 
2013-05-22 01:21:17 PM

jst3p: DrPainMD: When your economy depends on ever-increasing debt just to break even, you're screwed no matter what you do. Crash now, or crash harder later... those are our only two options. The idea that once the economy "recovers" you can stop borrowing and start paying down the debt (which would require cutting federal spending by at least $1.3 trillion per year to balance the budget, and even more to have a surplus) without the entire house of cards collapsing is insane.

Tell us more about how we are so in debt we can not recover.

[qzprod.files.wordpress.com image 850x500]


I doubt he is smart enough to understand why as a percent of GDP is important. He thinks that if you have any debt your "bankrupt" even though that's not how people (who have mortgage loans) or Businesses or anything else actually works. He is just repeating talking points he doesn't really understand.
 
2013-05-22 01:21:39 PM
You go Be--

"In particular," his testimony says, "the expiration of the payroll tax cut, the enactment of tax increases, the effects of the budget caps on discretionary spending, the onset of sequestration, and the declines in defense spending for overseas military operations are expected, collectively, to exert a substantial drag on the economy this year."

Oh, for fark's sake.
 
2013-05-22 01:21:48 PM
Congress is the problem...

www.colinfahey.com
 
2013-05-22 01:23:32 PM

Dusk-You-n-Me: But he's basically ignoring the maximize employment mandate


What could/should he do differently? He can't lower interest rates, printing more money (which he is already doing) has it's own downsides long term.
 
2013-05-22 01:23:33 PM

Rwa2play: About farkin' time someone called out Congress on their recalcitrance.  Like him or not, he has a point.


...no, he doesn't.  Because he's basically saying the recalcitrance is what's helping the economy.
 
2013-05-22 01:23:35 PM
He's kinda right cause congress never should have never allowed a private foreign central bank to be able to print our money then turn around and charge the printed value(not their manufactured cost) + intrest, forever inslaving the financial health of the nation to an unelected unknown cartel of international criminal enterprises.  The founders knew of this problem cause of dealing with the Bank of England(Rothschilds).  This is third installment and each time the result incomplete and utter failure cause they are never designed to be stable but as a way to steal the wealth and resources of nations through artificially manipulated bubbles.
 
2013-05-22 01:23:49 PM

Dusk-You-n-Me: That's where Congress is needed - legislation for stimulus, or another payroll tax cut or something similar.


Like that has anything to do with abortion or Obamacare.  Liberal, please!
 
2013-05-22 01:26:02 PM

IlGreven: Rwa2play: About farkin' time someone called out Congress on their recalcitrance.  Like him or not, he has a point.

...no, he doesn't.  Because he's basically saying the recalcitrance is what's helping the economy.


Uhhh, isn't he saying the opposite?
 
2013-05-22 01:26:23 PM

jst3p: What could/should he do differently?


I don't know. Not an expert but I'm not sure there's much more he can do in his position. And that's what he's (been) telling Congress.
 
2013-05-22 01:31:22 PM

Dusk-You-n-Me: jst3p: What could/should he do differently?

I don't know. Not an expert but I'm not sure there's much more he can do in his position. And that's what he's (been) telling Congress.


If there isn't much more he can do it is kinda unfair to say he is ignoring the "maximize emplyoyment" mandate then. I don't always agree with him but he seems to be out of moves with monetary policy, improvements need to be made fiscally.
 
2013-05-22 01:31:35 PM

Dr Dreidel: Dusk-You-n-Me: AverageAmericanGuy: he can set monetary policy without any oversight whatsoever.

Which he's done. If you read the article, or any of his previous testimonies, he's politely telling Congress "I'm out of moves here, get your sh*t together."

Follow-up: can you explain what that exchange between Klobuchar and Bernanke meant for those of us who don't speak finance? I speak politics pretty well, and it sounded like Benny was playing off the question, but Slate makes it seem like Toto pulled back the curtain.

The Fed is supposed to track inflation and create jobs. Is Klobuchar wondering what happens when those two motives conflict (and Slate explains that that's what's happening now)?


The idea is that the Federal Reserve is charged with keeping inflation stable and support measures to create stability in the marketplace (like not dicking around with the federal reserve rate on a whim). Monetary measures work up to the point of zero, and we as a country are very close to it. The man can't do much else because he's backed against a wall in terms of policy. Since the Teatards won't act with him, his only real option is to say "I guess I'll keep doing what I'm doing, asshats".

As a banker, he's happy with low inflation because it means his friends don't get hurt nearly as bad on loans over time.
 
2013-05-22 01:33:44 PM

jst3p: If there isn't much more he can do it is kinda unfair to say he is ignoring the "maximize emplyoyment" mandate then.


I'm not sure Yglesias meant it at as slight, perhaps more along the lines of 'ignoring something he can't do anything about anyway'.
 
2013-05-22 01:34:18 PM

jst3p: DrPainMD: When your economy depends on ever-increasing debt just to break even, you're screwed no matter what you do. Crash now, or crash harder later... those are our only two options. The idea that once the economy "recovers" you can stop borrowing and start paying down the debt (which would require cutting federal spending by at least $1.3 trillion per year to balance the budget, and even more to have a surplus) without the entire house of cards collapsing is insane.

Tell us more about how we are so in debt we can not recover.

[qzprod.files.wordpress.com image 850x500]


Something explaining the colors would be nice
 
2013-05-22 01:36:08 PM

trotsky: Uranus Is Huge!: Fark this guy.

Seriously? Advocating for tax cuts and deregulation? Whining about spending less on defense? How does spending half a trillion a year to chase Muslims around the worst parts of the planet help the ol' balance sheet?

It's like when Stalin would erase certain things from History. The GOP has erased Iraq from history. It's doesn't exist in their tiny minds anymore. Bush and Rumsfeld were great people! They helped get revenge on the mean old Taliban! Iraq? What's that?


A moron on twitter has been engaging me on since I wrote a response to some promoted nonsense Marco Rubio wrote the other day about immigration.

This dude focuses solely on immigrants dragging down the economy through having to spend money on them and social welfare. I countered with the cost of the Iraq war, which is somewhere in the neighborhood of 100 times that cost. He seriously countered with "We took the fight to them!".

Selective memory, friends.
 
2013-05-22 01:36:54 PM
Spend more, tax less ..oh and war too.

certainly sounds like a winning plan to me!
 
2013-05-22 01:42:48 PM
If I understand his word-salad, we've cut spending too much, but not enough.  Lolwut.  It sounds to me like he's saying we need to keep the spending for overseas military operations pumped up, but we have to cut spending, and so that means slashing SS, Medicare, etc.  So, invade Syria but let retirees eat dog food.

No, we're not going to continue, or increase, bloated defense spending and slash benefits, while cutting taxes for billionaires.  Not if I have anything to say about it.

Bernanke and his billionaire banker jet set are also a big part of the problem.
 
2013-05-22 01:45:28 PM

jst3p: "In particular," his testimony says, "the expiration of the payroll tax cut, the enactment of tax increases, the effects of the budget caps on discretionary spending, the onset of sequestration, and the declines in defense spending for overseas military operations are expected, collectively, to exert a substantial drag on the economy this year."

Are there any reputable economists that disagree with this? Serious question, I don't have an economics degree from a top 5 school or anything, but I know a little about coconuts and I find the subject interesting.


No, there aren't any reputable economists who will go on record and disagree.  There are, however, plenty of "economists for hire" who will fart and toe the line they're paid to toe.
 
2013-05-22 01:45:50 PM

jst3p: "In particular," his testimony says, "the expiration of the payroll tax cut, the enactment of tax increases, the effects of the budget caps on discretionary spending, the onset of sequestration, and the declines in defense spending for overseas military operations are expected, collectively, to exert a substantial drag on the economy this year."

Are there any reputable economists that disagree with this? Serious question, I don't have an economics degree from a top 5 school or anything, but I know a little about coconuts and I find the subject interesting.


Vernon Smith (Ph.D., Harvard, Professor of Economics at Chapman University and Nobel Prize winner) disagrees.

Friedrich Hayek (Nobel Prize winner) would certainly disagree.

James M. Buchanan (Ph.D., University of Chicago, Professor of Economics at George Mason University, Nobel Prize winner) would also certainly disagree.

Walter Block (Ph.D., Columbia University, Professor of Economics at Loyola University) disagrees with him.

Peter Boettke (Ph.D., George Mason University, Professor of Economics at George Mason University) disagrees with him.

Donald J. Boudreaux (Ph.D., Auburn University, Professor of Economics at George Mason University) disagrees with him.

Gene Callahan (Ph.D., Cardiff University) disagrees with him.

Thomas DiLorenzo (Ph.D., Virginia Tech, Professor of Economics at Loyola University) disagrees with him.

Richard Ebeling (M.A., Rutgers University, Ph.D., Middlesex University, Professor of Economics at Northwood University) disagrees with him.

Marc Faber (Ph.D., University of Zurich [magna cum laude]) disagrees with him.

Robert Higgs (Ph.D., Johns Hopkins University) disagrees with him.

The list is really long. Pretty much every economist who doesn't work for the government or a business that is heavily subsidized. But, they don't get much air time, as you can imagine.
 
2013-05-22 01:45:52 PM

Dusk-You-n-Me: Amy Klobuchar Asks Bernanke A Great Question And the Fed Chairman Has No Good Answer


Proud to have Amy as my Senator but that's hardly a "gotcha" exchange; price stability is hugely beneficial for economic recovery efforts now.
 
2013-05-22 01:49:18 PM

Uranus Is Huge!: Fark this guy.

Seriously? Advocating for tax cuts and deregulation? Whining about spending less on defense? How does spending half a trillion a year to chase Muslims around the worst parts of the planet help the ol' balance sheet?


It's economic suicide so no one making a non-political arguments that The War Against Terror is awesome economically is pretty much tossing smoke up your ass.
 
2013-05-22 01:49:22 PM

hammettman: No, there aren't any reputable economists who will go on record and disagree. There are, however, plenty of "economists for hire" who will fart and toe the line they're paid to toe.


DrPainMD: The list is really long. Pretty much every economist who doesn't work for the government or a business that is heavily subsidized. But, they don't get much air time, as you can imagine.


Those two posts, back to back, are kinda funny.

I guess I will study it out.
 
2013-05-22 01:49:41 PM

jst3p: Dusk-You-n-Me: But he's basically ignoring the maximize employment mandate

What could/should he do differently? He can't lower interest rates, printing more money (which he is already doing) has it's own downsides long term.


The difference is that the downsides to "printing more money" (mainly inflation) are easily addressed by the various tools at the Fed's disposal -- raising interest rates, selling off the various assets that it's been holding, increasing the reserve ratio, plus probably dozens of other means.  The downsides of extended periods of elevated unemployment -- decline in worker skills, greater burden on the social safety net -- those are the problems that the Fed can't address.
 
2013-05-22 01:49:56 PM
Damn redundant negatives....
 
2013-05-22 01:52:22 PM

Dusk-You-n-Me: He's got two mandates. Inflation he can (generally) do something about. But he's basically ignoring the maximize employment mandate, I think because there's not a whole lot he can do about it in his position. That's where Congress is needed - legislation for stimulus, or another payroll tax cut or something similar.


He's not ignoring it. Interest rates are effectively zero, money has been printed, the financial system is being subsidised. Bernanke is simply out of levers to pull. In certain situations (like this one) monetary policy is not enough to stimulate employment, so yeah, you need a fiscal stimulus. But that's not to the same as Bernanke ignoring his employment mandate.
 
2013-05-22 01:52:34 PM

DrPainMD: The list is really long.


If you're measuring dicks, here's 300 economists asking the President in March 2011 not to cut investments to infrastructure and investments in science and technology. Otherwise known as government spending. Link, PDF

Or 650 economists, five of them Nobel winners, advocating for an increase in the minimum wage. In 2006. Link, PDF
 
2013-05-22 01:55:22 PM
FTA
Translation:  Savers, I know it isn't much fun getting zero interest rates on your savings accounts, but the alternative would likely be worse.


So I guess, borrow money and buy a bigger house FTW?
 
2013-05-22 02:00:59 PM

DrPainMD: Friedrich Hayek (Nobel Prize winner) would certainly disagree.

James M. Buchanan (Ph.D., University of Chicago, Professor of Economics at George Mason University, Nobel Prize winner) would also certainly disagree.


It's amazing that a pair of dead economists can disagree with Bernanke's assessment of what is slowing down the US economy this year.
 
2013-05-22 02:02:20 PM

Bad_Seed: DrPainMD: Friedrich Hayek (Nobel Prize winner) would certainly disagree.

James M. Buchanan (Ph.D., University of Chicago, Professor of Economics at George Mason University, Nobel Prize winner) would also certainly disagree.

It's amazing that a pair of dead economists can disagree with Bernanke's assessment of what is slowing down the US economy this year.


There is a "Weekend at Bernie's" joke to be made here, but I am too busy to find it.
 
2013-05-22 02:04:37 PM

jst3p: Dusk-You-n-Me: jst3p: What could/should he do differently?

I don't know. Not an expert but I'm not sure there's much more he can do in his position. And that's what he's (been) telling Congress.

If there isn't much more he can do it is kinda unfair to say he is ignoring the "maximize emplyoyment" mandate then. I don't always agree with him but he seems to be out of moves with monetary policy, improvements need to be made fiscally.


Well, there *is* bank regulation...
 
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